indexing lagged against 15 largest no load funds

[jIMOh]

Originally Posted by eridanus

Hmmm.

http://finance.yahoo.com/q/bc?t=5y&s...=m&q=l&c=vtsmx
http://finance.yahoo.com/q/bc?t=5y&s...=m&q=l&c=vfinx

http://finance.yahoo.com/q/bc?t=my&s...=m&q=l&c=vtsmx
http://finance.yahoo.com/q/bc?s=PRFD...=m&q=l&c=vfinx


Can the "active funds are better!" crowd please look into their crystal balls and tell us which funds will have done better than VTSMX over a ten year period ending on January 2017. Thanks.

Fair enough... I won't claim I will do better, especially if market is going UP... but if it goes down, I hope you enjoy the ride.

[jazz4cash]

Originally Posted by jIMOh

Fair enough... I won't claim I will do better, especially if market is going UP... but if it goes down, I hope you enjoy the ride.

That's what I usta think also.....managed funds could sidestep market declines, but my experience has been otherwise....some beat the market during a decline, but most do not. I won't even attempt to substantiate with data.......just saying I no longer feel that way. Large funds generally cannot react quickly anyway and if they are very reactive the trading cost and tax implications can be a drag.

[Running_Man]

Originally Posted by eridanus

Hmmm.

http://finance.yahoo.com/q/bc?t=5y&s...=m&q=l&c=vtsmx
http://finance.yahoo.com/q/bc?t=5y&s...=m&q=l&c=vfinx

http://finance.yahoo.com/q/bc?t=my&s...=m&q=l&c=vtsmx
http://finance.yahoo.com/q/bc?s=PRFD...=m&q=l&c=vfinx


Can the "active funds are better!" crowd please look into their crystal balls and tell us which funds will have done better than VTSMX over a ten year period ending on January 2017. Thanks.

Could you tell me how much the VTSMX will outperform a 10 year treasury? this arguement that the study is flawed is silly. These are all very large funds that have been large funds for years. The performance is very surprising to me, as I am an individual stock and S&P500 when I just want to change my stock allocation kind of guy.

I never would have expected the Fidelity Contrafund to have performed so well. The time to leave a fund if you go the managed fund route is when the management changes. If Will Danoff has been able over that time period to manage billions and beat the S&P 500 investing in whatever the hell he wants under what scenario would that change? Sounds to me like the arguements against investing with Warren Buffet back in the early '80's. Something about reversion to the mean.
Here is how the S&P 500 & Fidelity Contrafund compare over the years 1990 to 2007 with an initial $100,000 investment using the average annual results for each time period:

100,000.00 100,000.00
116,000.00 112,000.00
134,560.00 125,440.00
156,089.60 140,492.80
181,063.94 157,351.94
210,034.17 176,234.17
243,639.63 197,382.27
282,621.97 221,068.14
327,841.49 247,596.32
380,296.13 277,307.88
441,143.51 310,584.82
511,726.47 347,855.00
593,602.70 389,597.60
688,579.14 436,349.31
798,751.80 488,711.23
926,552.09 547,356.58
1,074,800.42 613,039.37
1,246,768.49 686,604.09


Here is how they look if you invested 10 years ago:
Contrafund VANGUARD 500
10.89% 7.55%
100,000.00 100,000.00 1997
110,890.00 107,550.00 1998
122,965.92 115,670.03 1999
136,356.91 124,403.11 2000
151,206.18 133,795.55 2001
167,672.53 143,897.11 2002
185,932.07 154,761.34 2003
206,180.07 166,445.82 2004
228,633.08 179,012.48 2005
253,531.22 192,527.93 2006
281,140.77 207,063.78 2007

And if just the last 5 years
Contrafund VANGUARD 500
11.62% 6.69%
100,000.00 100,000.00 2002
111,620.00 106,690.00 2003
124,590.24 113,827.56 2004
139,067.63 121,442.62 2005
155,227.29 129,567.14 2006
173,264.70 138,235.18 2007


This is not cherry picking it is the single biggest actively managed fund. It has been very big for a long time. This is not Warren Buffet, this is not Peter Lynch. Were the results the exact opposite with the S&P and Contrafund results reversed they would be in the new updated chapter in the Four Pillars of Investing. It is a disingenous arguement to use the past to argue for index funds and then argue about the FUTURE as a means to avoid a manager that has kicked that index for a considerable time in the past.


I was heavily encouraged to invest in the Contrafund by a retired friend of mine back in 1990 but I never did as I prefer individual stocks.

[eridanus]

The issue isn't that SOME funds can beat the indices. The issue is that we can't KNOW which ones will do so.

So, again, can someone tell me which funds will beat the S&P500 for the 10 year period ending January 2017. Thanks.

[Mysto]

One way to look at it - I don't know what an active management fund will do in the future but I know for certainty that a market index will match the market. And I have a lot of data as to that return.

In Vegas I see some guys walk away with a fistfull of money but all things considered, I'd rather bet with the house. They KNOW what they will win in the long haul because it has been already calculated and designed in.

Your milage may vary - place your bets and come back to me in 20 years.