- Research suggests that less than one percent of professional active manages are “skilled” at what they do.
- Given this, the odds of picking a solid active manager is not just slightly worse than a coin toss; in fact, the chances are closer to slim to none.
- Therefore, a passive investing strategy may be more sensible over the long run for most investors.
Continue reading “Passive is the New Aggressive (Part 7)”
- Over long periods, a passive investing approach in index funds is more likely to lead to an outcome that falls in line with a given benchmark.
- With an active investing approach, where mutual fund fees are higher, outcomes are far less certain.
- As such, the long-term opportunity cost of an active approach can be significant, and perhaps even disastrous.
Continue reading “Passive is the New Aggressive (Part 6)”
- Hobbies can provide lasting benefit by allowing individuals to refocus their efforts away from their careers towards alternative forms of enjoyment.
- Nevertheless, active investing as a hobby might not be the best use of one’s free time.
- Not only are the chances of adding value from this endeavour very slim, but also, the costs associated with investing unwisely can profoundly impact one’s long-term goals and aspirations.
- As an example, most investors often overlook opportunity cost when making investment decisions even though this particular expense can be significant.
Continue reading “The World’s Most Expensive Hobby (Part 1)”
- The fee differential between active and passive mutual funds may not appear to be significant at first sight.
- However, over long periods, the impact of higher fees associated with active investing through mutual funds can be considerable, as compared to passive alternatives.
- As such, over an investment lifetime of 45 years, excessive fees could wipe out a large percentage of your potential wealth.
- Therefore, going with a passive approach has the potential to mitigate this particular concern.
Continue reading “Passive is the New Aggressive (Part 5)”