"Passive investors who buy the market will capture better results than most active investors who try to beat the market."
"As a group, mutual fund managers have no special talents and outperformance is more a matter of luck than skill. The academics have been saying this for years."
"Wall Street promotes the possibility of earning superior returns--not the probability."
"Attempting to earn above market returns by picking actively managed mutual funds is an inefficient use of time and money."
"Mutual funds; brokerage firms; money management companies; advisors; or what's written in most books, magazines, investment newsletters, and web sites make it seem as though everyone is winning. That's simply not true and can't be true."
"Investment greats such as Warren Buffett, Peter Lynch, and David Swensen are all outspoken advocates for passive investing. In addition, the U.S. government's Thrift Savings Plan (TSP) for federal employees has only passive investment options available for participants."
"Statistics show that investors lose over 1% per year by trying to shift their investment in front of the next market move."
"The truth must be repeated over and over again because lies about investing are constantly being told."
"Survivorship bias occurs in performance data when the entire return histories of non-surviving entities are deleted from the data-base."
"Academics began studying mutual funds in the 1960s to discover managers who had skill. Their efforts were unsuccessful back then and new efforts remain unsuccessful today."
"Active management was exposed as a loser's bet many decades ago by the academic community."
"Princeton professor Burton G. Malkiel published his own in-depth mutual fund analysis. His conclusions were similar to all the other academics who studied the data. Where was the skill?"
"The Vanguard 500 Index Fund beat over 85% of actively managed funds during the 25 year period (1984-2009) -- even before making adjustments for terminated funds, risk factors, sales loads, and taxes."
"The S&P benchmarks outperformed the active managers in most style and size groups over most periods."
"It doesn't take any skill to buy stocks that have recently outperformed the market."
"After adjusting for beta, firm size, style, and momentum factors, Carhart concluded that an equal weighted portfolio of the mutual funds underperformed by 1.8% per year."
"According to Allan Roth's model, the chance that a single actively managed fund will beat a comparable index fund over any single year is 42%. The success rate drops to 30% over 5 years, 23% over 10 years, and just 12% over 25 years."
"Assume you own 10 actively managed funds. According to Roth's data, the odds of beating an all index fund portfolio are 27% over one year, 9% over five years, 6% over 10 years, and an incredibly low 1% over 25 years."
"The winning active managers in one period are typically not the winning managers in the next."
"An overwhelming percentage of investors and advisors select mutual funds based almost exclusively on past performance. Their underlying assumption for relying on past results is that it has predictive value. Not so."
"Every economics student knows there's no such thing as a free lunch, especially on Wall Street. Any extra gain in one person's account means a loss in someone else's."
"The loser is the investor who believes sector rotation strategies and market timing decisions can beat the market."
"Trying to beat the market creates a huge distraction that takes your mind off the mission of building wealth."
"Wall Street and the actively managed mutual fund industry spend an inordinate amount of money flooding the airways, print media, and Internet with messages about how their active strategies will either save you from calamity or make you rich."
"Wall Street know that the more confused and off balance you are about investing, the more money they'll make."
"I joined the investment industry as a rookie stockbroker in 1988. -- If a client did inquire about index investing, our canned response was, "Index funds guarantee average performance. We know you can do better." That was a true statement. It is possible to do better; it's just not likely."
"Only successful investors are interviewed in the media, and only the winning mutual funds are advertised.--losers sit quietly in the background."
"The hope of beating the market sells active management, magazines, newsletters, web site subscriptions, books, and technical analysis trading programs."
"Investors who have several winning bets in a row often misinterpret luck as skill."
"There'll always be years when an actively managed portfolio outperforms a passive portfolio, but the active funds won't outperform by much and not for long."."
I just don't know
