|
|
|
|
|
|
by rofo1
1273 days ago
|
|
|
Where did you find that 10% beat S&P? First of all, that's low %, but I don't think even that is accurate. So you have 1 in 10 chance of identifying who might beat the S&P. Congrats. Can you share a source for that? As far as I remember, the odds are around 1 in 300 (this is from memory, but that information is from Bogle's books directly). I think that research was done since 1970, but I am not sure. |
|
|
The actual stat they provide is:
> And over a full 20-year period ending last December, fewer than 10 percent of active U.S. stock funds managed to beat their benchmarks.
Still, if it was 1 in 300 I think they would say “fewer than 1% or fewer than 0.5%”. So I’m assume between 9 and 10 percent beat the S&P.
I suggest reading the linked article with the mindset that nearly all of the content comes from S&P directly. It’s basically a market piece. For instance, when they say the mutual funds don’t perform consistently, they use a crazy metric of picking the top 25% performers from one year and seeing how many are in the top 25% next year. Basically their point is that mutual funds won’t beat the S&P every single year, and therefore the S&P is better. But if course, unless you’re only investing for a single year, you should care more about the expected total return. Just my two cents.