Step 5: Manager Pickers “An investor doesn’t have a prayer of picking a manager that can deliver true alpha. Even over a 20-year period, the past performance of an actively managed fund has a ton of random noise that makes it difficult, if not impossible, to distinguish luck from skill.” – Eugene Fama, Ph.D., Nobel Laureate in Economics, 2013 65th CFA Institue Annual Conference, 2012
“I have become increasingly convinced that the past records of mutual fund managers are essentially worthless in predicting future success. The few examples of consistently superior performance occur no more frequently than can be expected by chance.” – Professor Burton G. Malkiel, Ph.D., A Random Walk Down Wall Street, 1973
“Wall Street’s favorite scam is pretending that luck is skill.” – Ron Ross, Ph.D., The Unbeatable Market, 2002
“ You will almost never find a fund manager who can repeatedly beat the market. It is better to invest in an indexed fund that promises a market return but with significantly lowered fees.” – John Bogle, Economist, July 3, 2003, quoted in The Little Book on Common Sense Investing, 2007
Published on Jun 1, 2015
This book reveals the potential land mines and pitfalls of active investing and educates readers on the benefits of passive investing with i...