The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing


Subject:  Re: Allocation suggested by FinancialEngines Date:  4/23/2002  5:00 PM
Author:  TMFPixy Number:  34322 of 100951

Intercst writes:

How many is "many"?

Galeno's post stating that only about 5% of actively managed funds beat the S&P500 over a 20-year holding period matches the research I've seen. If you have any credible research that shows that a higher percentage of actively managed funds out perform, please post a link. I'd be interested in reading it.

As would I. All the research I've seen shows the vast majority of managed funds underperform the index fund over 20 years on a pretax basis. In a tax deferred account, that would hold true on an after-tax basis as well. I've never seen any data to show otherwise. Sure, there are a very few managed funds that will do better than the index fund, but trying to pick those prospectively is far harder than trying to pick a winning stock. Indeed, until someone shows some research indicating otherwise, over the long haul an index fund is virtually a no brainer.


Copyright 1996-2021 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us