Freelance MD, a community of physicians that gives you more control of your career, income, and lifestyle. Join us. It's free, which is a terrific price. Grab Some Free Deals
Search Freelance MD

Freelance MD RSS    Freelance MD Twitter     Freelance MD Facebook       Freelance MD Group on LinkedIn      Email

Sponsors

2nd MD Special Offer

ExpedMed CME
Medical Fusion Conference

Medvoy Society of Physician Entrepreneurs

20 Newest Comments
Newest Nonclinical Physician Jobs
Thoughtstream
This area does not yet contain any content.
Navigation
« The Power of a Blog to Get Your Message to the Right Audience | Main | Free Webinar: Protecting Your Reputation As A Doctor »
Sunday
May222011

Active Mutual Fund Managers Don't Have Skill

While most of the video interviews with money managers on Yahoo Finance is just a bunch of garbage, this one is right on. This video discusses why using actively managed mutual funds is a waste of time.
Here's a short summary:
  1. Prices are fair. This means that all availalable information about a particular stock or the market as a whole is already reflected in today's price.
  2. Competition is huge. Institutions make most trading activity and they have access to the same information. So when they trade with each other it's extremely unlikely that one person or mutual fund manager can consistently outperform the market.
  3. Since prices are fair, it's the amount of risk you take that determines your portfolio's return.
  4. CommentSo while active mutual fund managers don't have skill in generating higher investment returns for you, they do have skill in charging you higher fees and fattening their wallets not yours.

Reader Comments (2)

One more thing. While active mutual fund managers don't have skill in generating higher investment returns, they do have skill in charging you higher fees and fattening their wallets instead of yours.

Another post touting efficient market theory... How did Warren Buffett, Peter Lynch, Bill Ruane, Glen Greenberg, Walter Schloss and others outperform the indices for very long periods of time? Some active investors do have skill.

Jun 11 | Unregistered CommenterDocMoney

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
All HTML will be escaped. Hyperlinks will be created for URLs automatically.

Join Freelance MD

captcha
Freelance MD is an active community of doctors.

All rights reserved.

LEGAL NOTICE & TERMS OF SERVICE