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Reply to @VintageFreak: With managed funds you are also assuming market risk to a large degree. R^2 of most managed funds are very high.
Bill Miller was a star and well know manager. It makes a good example for illustration purposes. nKen Heebner was a star manager as well. How about Bruce Berkovitz. Before they have fallen they all enjoyed better than market returns. Manager risk is real. It can happen to any managed fund. You never know when it will hit you. Only after the fact.
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You want to assume Market Risk - invest in an index fund.
You want to assume Manager Risk - go with managed fund.
I never sell my "managed funds". I only sell my "market funds". Sometimes I make mistakes like NARFX.
Wait a second. NARFX is going up now
Bill Miller was a star and well know manager. It makes a good example for illustration purposes. nKen Heebner was a star manager as well. How about Bruce Berkovitz. Before they have fallen they all enjoyed better than market returns. Manager risk is real. It can happen to any managed fund. You never know when it will hit you. Only after the fact.