Pick Your Manager
Problems Track Record Investing “Most investors follow the crowd down the path to comfortable mediocrity,” says David Swensen in Pioneering Portfolio Management.70 Anxious to capture the gains that come with a winning mutual fund manager, manager pickers blindly chase a hot performing fund manager’s track record, failing to realize their odds for future success have vastly diminished. Figure 5-1 shows the results of a study using Morningstar data reflecting the performance of active fund managers for the 11 years from 2002 to 2013. The chart depicts how an average of only 7.8% of the top 100 fund managers repeated their Figure 5-1
This book reveals the potential land mines and pitfalls of active investing and educates readers on the benefits of passive investing with i...