FYI: A new study has just shaken one of the biggest investment myths on Main Street.
An analysis of mutual fund stock trades over the past two decades has thrown into question the rationale that has sent everybody and her grandmother stampeding into low-cost index funds and exchange traded funds.
That rationale: That even skilled mutual fund managers can’t beat the stock market indices, so there’s no reason why you should pay someone extra to try.
Not true, write finance and accounting professors Linda Chen of University of Idaho, Wei Huang of the College of Saint Benedict & Saint John’s University, and George Jiang of Washington State University, after an exhaustive study of nearly 2,000 U.S. mutual funds’ stock trades by month from January 1998 to March 2015.
Regards,
Ted
https://www.marketwatch.com/story/investors-widely-held-beliefs-about-etfs-and-index-funds-may-be-wrong-2019-04-03/print
