Investing: Are You Playing the Loser’s Game – And Don’t Know It?!?

Active money management fails once again!


This means investors are leaving tens of billions of dollars on the table.

Is this you!?!

Or someone you know?

 

Click HERE to read Larry Swedroe’s article about the semi-annual report from the S&P showing that over a 5-year horizon the vast majority of active fund managers failed – again – to beat their benchmark averages.

“Active” management (vs. buy-and-hold “passive” management) is where an investment advisor (they used to be called “stock brokers”) uses your money to chase their egos in search of the next hot stock. This goal of Wall Street to keep things stirred up is what we call the “Loser’s Game”.

While active management is exciting (to the broker), academic studies show time and again that passive management is the superior (boring) way to accumulate wealth.You may think that you are a buy-and-hold investor because you seem to stick with the same funds over time. But unknown to you is that the manager inside the fund may be buying and selling like crazy. This eats up your return due to trading costs, bid/ask spreads, etc.

Let me know if you have any comments or questions after reading the article.

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About Kate Willeford, Dental CPA & Advisor

Dental CPA & Advisor serving accounting, tax, management, transition and financial planning needs of dentists since 1975.
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