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What's ringing in my ears...."Indexing is about tracking the market, not outperforming". LOL. Well I sorta agree. HOW I earn the returns is more important to me. I want consistency.
However while I don't disagree with the argument, I'm not a big fan of Jaffe. On the one hand we have financial Pron. On the other, I think Jaffe makes arguments from both sides. The simple fact of the matter is EVERYBODY compares their fund against some benchmark even though they may say it does not matter.
So yes, enhanced indexing may or may not outperform. The thing is we need to wait for an article 10, 15, 20, 25 years from now. At any given point in time enhanced indexing might have yielded lower or higher results than the S&P 500 and the appropriate party would be claiming victory, only for the trophy to keep changing hands.
Meanwhile, depending on investors see those articles, they will form opinions on which is better and then hold on to it till the rest of their investing lives. One more reason I think looking at chart simply to see how a fund does in good times and bad without relative to ANY index might be a good thing. Look at a fund for what it is in absolute terms. That's what keeps me in PVFIX. Anyone else who bought PVFIX at beginning of 2013 will likely sell (or might even have now) if he compares it against the Russell 2000.
Comments
Regards,
Ted
However while I don't disagree with the argument, I'm not a big fan of Jaffe. On the one hand we have financial Pron. On the other, I think Jaffe makes arguments from both sides. The simple fact of the matter is EVERYBODY compares their fund against some benchmark even though they may say it does not matter.
So yes, enhanced indexing may or may not outperform. The thing is we need to wait for an article 10, 15, 20, 25 years from now. At any given point in time enhanced indexing might have yielded lower or higher results than the S&P 500 and the appropriate party would be claiming victory, only for the trophy to keep changing hands.
Meanwhile, depending on investors see those articles, they will form opinions on which is better and then hold on to it till the rest of their investing lives. One more reason I think looking at chart simply to see how a fund does in good times and bad without relative to ANY index might be a good thing. Look at a fund for what it is in absolute terms. That's what keeps me in PVFIX. Anyone else who bought PVFIX at beginning of 2013 will likely sell (or might even have now) if he compares it against the Russell 2000.