One of the promises
made by active managers is that they can move to cash before the markets tank and then get reinvested before they recover.
I never meant to make you cry And though I know I shouldn't call It just reminds us of the cost Of everything we've lost Bad timing, that's all — Bad Timing, Blue Rodeo One of the promises
made by active managers is that they can move to cash before the markets tank and then -LSB-...]
Not exact matches
Bradley believes that
active managers can add value
by making tactical shifts in asset allocation — though not too often, and always within a fairly narrow range.
Obviously, it will have to be 20 per cent (ignoring fees) and so there is no way that a comparison between the average return earned
by the
active managers with the index return will
make investors aware that markets have become efficient.1 In other words, the warning light to signal that markets have become inefficient will never light up and so there is no reason to expect that investors will come to a realisation that the flow of investment funds to index investing has gone too far — meaning that the envisaged constraint on the flow of funds to index investing is unlikely to eventuate.»
The Wall Street Journal recently reported that, according to analysis
by Credit Suisse, the correlation among S&P 500 sectors had fallen close to its lowest level ever, and that this was good for
active equity
managers, «who find it easier to
make money betting on specific companies or trends when stocks aren't all moving together.»
Now, here's the logical trick: since the sum - total of
active and passive investments matches the market, the proportion allocated to any market segment
by active managers must, in aggregate, equal the allocation
made by passive investors.
Most
active fund
managers try to outperform their benchmark indexes
by picking stocks and
making tactical plays, and most can not do this successfully after accounting for their fees and transaction costs.
Making the Case for Passive Investing's Triumph
By almost any measure — performance, inflows and certainly bang for the buck — passive funds for years have trounced
active managers.
About 30 analysts are responsible for their own slice of the portfolio, overseen
by three
managers who oversee the big picture and
make sure the portfolio is constrained in terms of the level of
active risk.