Wall Street Is A Rentier Rip-Off: Index Funds Beat 99.6% Of Managers Over Ten Years | Zero Hedge
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he entire financial management industry is a profit-skimming rentier arrangement. It may seem uncharitable to note that only .4%--that's 4/10th of 1%--of mutual fund managers outperform a plain-vanilla S&P 500 index fund over 10 years, but that is being generous: by other measures, it's an infinitesimal 1/10th of 1%.
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Almost no one can beat the market - Howard Gold's No-Nonsense Investing - MarketWatch
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The study documents that in painful detail . Barras, Scaillet and Wermers tracked 2,076 actively managed U.S. domestic equity mutual funds between 1976 and 2006. They found that after fees, three-quarters of the funds exhibited zero “alpha,” a fund’s excess return over a benchmark index. And 24% of the funds were run by unskilled managers (who had negative alpha, or value subtraction).
And — are you sitting down? Only 0.6% — you read that right, 0.6% — showed any true skill at beating the market consistently, “statistically indistinguishable from zero,” the three researchers concluded.
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Certainly, one can find a mutual fund that will beat the market over a select period of time, but it's much harder to find one that outperforms over the long-term. Certainly, one could jump to the newest, hot manager who will beat the market in the future, but if one possess the clairvoyance, why not select individual stocks, instead?
Honestly, who has actually bought an actively managed fund that has beaten the index over the last 10 or 20 years? I'd like to know how you selected that fund, and how will you find the next
super-manager.