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2018 Wasn’t The Year Of The Stock Picker: SPIVA Year End 2018
FYI: Year after year, when the outlook for equity markets looks uncertain, professional money managers say this could be the year for stock pickers. And year after year it isn’t.
Year after year the SPIVA reports persistently document the general failure of active fund management to even match the performance delivered by comparable Index products. It's a sad story.
Over a one year period many excepts do exist ( the Buffetts of the investment world), but even for that short period the odds are often below a 50% outperformance score. Over even a modest 3-year period, the active management outperformance drops to below a disappointing 20% outperformance record. Over longer periods, the failure rate goes north of 90%. Indeed a sad, sad story. Good luck on identifying those 20% that are superior before the fact.
A few of us have the intuition, the experience, and/or the statistical,analyses skills to successfully make that winning selection. From years of trying, I conclude that I do not. So, basically it's Index investing for me with a small fraction still in active management. I'm a slow and optimistic learner. Good luck to all MFO learners, both fast and slow.
Comments
Year after year the SPIVA reports persistently document the general failure of active fund management to even match the performance delivered by comparable Index products. It's a sad story.
Over a one year period many excepts do exist ( the Buffetts of the investment world), but even for that short period the odds are often below a 50% outperformance score. Over even a modest 3-year period, the active management outperformance drops to below a disappointing 20% outperformance record. Over longer periods, the failure rate goes north of 90%. Indeed a sad, sad story. Good luck on identifying those 20% that are superior before the fact.
A few of us have the intuition, the experience, and/or the statistical,analyses skills to successfully make that winning selection. From years of trying, I conclude that I do not. So, basically it's Index investing for me with a small fraction still in active management. I'm a slow and optimistic learner. Good luck to all MFO learners, both fast and slow.
Best Regards