Which ones should we choose going forward? If you can do THAT, you need to start your own company.
OK, 90% of the time.
Fidelity Blue Chip Growth. FBGRX.
It has outperformed the index since its inception and at almost any endpoints you care to choose. I'm going to assume it will continue to outperform the index.
And even if it has a down year, there is enough accumulated growth that even if the index beats it in any given year over the long haul it will outperform the index.
And I have started two companies in my lifetime.
This is sensible to me. Why not have a mix of index and managed funds? This rigid adherence to *only* index funds, or worse yet, only *one* index fund is a deliberate plan to always accept market average returns.I have a mix of mostly broad market index funds along with a few dividend index funds/ETFs and a few managed funds. There are several low expense managed funds from Vanguard (managed by Wellington and Primecap), T Rowe Price, American Funds, and Fidelity, which have great long-term records. Some retirees invest mainly in Wellesley. If that works for them, I doubt anyone could seriously argue that’s a bad choice.
This is sensible to me. Why not have a mix of index and managed funds? This rigid adherence to *only* index funds, or worse yet, only *one* index fund is a deliberate plan to always accept market average returns.
That's the point (minus small fees)!
Conversely, it is a deliberate plan to always achieve market average returns, and avoid under-performance, which is about (probably less than) a 50-50 proposition for active investing.
-ERD50
Yep, just math. Going back 34 years to 1988 I put seed money of $10,000 in Vanguard S&P 500 Index fund and also in Fidelity Blue Chip Growth and Franklin Dynatech. No subsequent investments. All dividends reinvested.
This exercise was repeated every four years. Put $10,000 in each of these funds on January 1, 1992. Repeat for January 1, 1996, and so forth. In my example, the index fund beat the active funds one time out of eighteen tries, or 5.5%. The one time the index beat my active funds was putting $10,000 into each fund on Jan 1, 2020, but 18 months--that's not the long haul, is it?
Generally speaking, yes, index funds will beat the universe of active funds over the long haul. However, it's depends on which active funds you choose.
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Fidelity Blue Chip Growth. FBGRX.
It has outperformed the index since its inception and at almost any endpoints you care to choose. I'm going to assume it will continue to outperform the index.
And even if it has a down year, there is enough accumulated growth that even if the index beats it in any given year over the long haul it will outperform the index.
And I have started two companies in my lifetime.
True enough in an investment theory sort of context. The SPIVA reports for the last 20 years always have shown the vast majority of stock pickers to be losers just on a absolute return basis, though. No need for nuance, the evidence is so overwhelming. Then there is the analytical proof by he who shall not be named, which I have never seen challenged.... The risk-adjusted return is what matters, not the absolute return. ...
This is a huge problem I often see on this board.
You haven't accounted for risk.
The risk-adjusted return is what matters, not the absolute return.
The blue chip fund you're so enamored with is riskier than a market index, so sure, one'd expect a higher return.
OldShooter, in post 41 said:True enough in an investment theory sort of context. The SPIVA reports for the last 20 years always have shown the vast majority of stock pickers to be losers just on a absolute return basis, though. No need for nuance, the evidence is so overwhelming. Then there is the analytical proof by he who shall not be named, which I have never seen challenged.
Here's a chart based on a SPIVA report from a few years back. I'll get around to freshening it up one of these days, but a new one will look about the same. They never change much.
OldShooter, in post 41 said:
"Until you can tell me what's wrong with it, I wont be responding here anymore."
Of course what you say is true, but here we are 59 posts into the subject matter and this is the first mention of risk. In other words, it wasn't a factor in the original comparison.
OldShooter, in post 41 said:
"Until you can tell me what's wrong with it, I wont be responding here anymore."
^^^If you can name a fund whose manager has beaten their index for ten years and who is guaranteed to stay in place for the coming ten years and beat it again, inclusive of fees, then, yes, I will have learned something. Meanwhile, Vanguard’s fees are almost certain to stay low and its computers don’t even sleep, much less get sick, die or retire, or have a bad run vs. their indices.
When I was at Megacorp we had a profit sharing plan that did for most of the 29 years I was there. But let's talk about why and what can happen:^^^If you can name a fund whose manager has beaten their index for ten years and who is guaranteed to stay in place for the coming ten years and beat it again, inclusive of fees, then, yes, I will have learned something. Meanwhile, Vanguard’s fees are almost certain to stay low and its computers don’t even sleep, much less get sick, die or retire, or have a bad run vs. their indices.
^^^If you can name a fund whose manager has beaten their index for ten years and who is guaranteed to stay in place for the coming ten years and beat it again
^^^If you can name a fund whose manager has beaten their index for ten years and who is guaranteed to stay in place for the coming ten years and beat it again, inclusive of fees, then, yes, I will have learned something. Meanwhile, Vanguard’s fees are almost certain to stay low and its computers don’t even sleep, much less get sick, die or retire, or have a bad run vs. their indices.
In order to promote an actual discussion (which I didn't do in my first reply), what -possible- things would it take to "convince you" there's more out there than just indexes? If the answer is "nothing, my mind is made up" I'll accept that. But if you're open to new ideas/views, I'm happy to talk.