[danfang]

All these traders are playing in a casino. Yes, the casino favors the house. Yes, people have figured out how to make big bucks by counting cards. The rules will probably change so the house keeps on winning.

To me, all this indicates that the only way to win is to not play. Passively investing in the market as a whole is the only way to win long term.

Disclosure: I work at a robo-advisor specializing in long term passive investing. My views are my own, and in no way associated with the views of my employer. This is not investment advice.

[smabie]

Which market? What country? What assets?

Are you allocating money to Pokémon cards? Why or why not?

PS: all investing is active management. full stop.

[danfang]

I'm thinking of a globally diversified portfolio of index funds based on modern portfolio theory.

You can read about the investment strategy, but basically it comes down to risk adjusted returns over long periods of time.

It will become abundantly clear why Pokemon cards are not part of that strategy.

We probably have different definitions of active investing. I take my definition from Wikipedia: https://en.wikipedia.org/wiki/Active_management

In my mind, another way to divide the two is about assumptions about efficiency. Passive investors assume that the market is generally efficient, and do not try to exploit inefficiencies to generate returns. Active investors generate returns from perceived inefficiencies (information asymmetry, etc).

[salawat]

That's exactly the opposite of not playing. Your money is still in and propping up the misbehavior in the system.

You must take responsibility for what and who gets empowered by your hard earned wealth. There is no other way around it.and a single datapoint leaving the system won't fix it. It needs to be a collective action.

Sadly, (and I hope I am proven wrong) we aren't so great at that.

[smabie]

What kind of indices tho? Every decision ultimately reduces all investment to active management. Like are you holding crypto indices or real estate indices, etc etc.

Index selection is active management.

[danfang]

Yes, if your definition of active is that you had to make a decision, yes. Pretty much everything we do is active. In the same way that sleeping is exercise because your muscles move.

[smabie]

I think the distinction is artificial. The kind of strategies robo-advisors use aren't really that different from any other investor. For example risk parity, "smart" beta (getting exposure to risk premia factors) are all things robo advisors and traditional fund managers do. What's the difference?

[curtis3389]

Funny enough, I overheard a comic shop owner today saying he has $180k in 9 pokemon cards he had rated, and some of them are only rated 5/10.

The return on investment there leaves me at a loss for words.