The latest S&P Index Versus Active report was released today. Every six months, S&P releases this report to compare the performance of actively managed funds to their benchmarks. Each time it comes out, the conclusion is the same. Most actively managed funds underperform their benchmarks over long time periods.
This is no longer a surprise. People have been selling their high priced actively managed funds for years and replacing them with index funds. That’s a good start. Now how do we get the word out to everyone who is picking stocks themselves?
We just concluded that professional money managers who invest as their full-time job cannot consistently outperform an index. What makes you think you can do it in your spare time? Maybe you had some luck buying Moderna early last year or you’ve ridden Tesla to big gains. If that’s you, stop while you’re ahead. The odds are not in your favor.
About the Author: John O’Connor
John has more than ten years experience as an Investment Advisor. He focuses on devising and maintaining portfolios that meet individuals’ needs, investment research, and investment strategy. John has been recognized as a “FIVE STAR wealth manager” by Twin Cities Business Magazine 2016-2020.
Legal Disclaimer: These posts do not constitute an offer or recommendation to buy or sell any securities or instruments or to participate in any particular investment or trading strategy. They are for informational purposes only. CTW gathers its data from sources it considers reliable. However, CTW makes no express or implied warranties regarding the accuracy of this information or any opinions expressed by the author and may update or change them without prior notification.