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11-20-2018, 02:45 PM
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#58
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Major General 
Drives: 2011 Cayman Base, 2016 M235
Join Date: Mar 2016
Location: Kansas City
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Quote:
Originally Posted by BayMoWe335
For the long term, it is prudent. The optimal portfolio is one invested in a low cost S&P500 index, reinvesting dividends. It will beat 99% of actively managed funds and anyone trying to pick stocks, reblance, reduce risk, etc.
When you try to "reduce risk" you are trying to time the market. You will underperform, period. They all do.
Why do you think Warren Buffet bet any hedge fund willing to take him up on it that the S&P500 will outperform their actively managed fund? Because it will over the long term and he was right, btw.
The S&P500 gained 125.8% over ten years. The five hedge funds, picked by a firm called Protégé Partners, added an average of about 36%.
There are people who can do it, but your chances of finding that person are essentially 0. Also, when that person is found, money tends to flow to them and they eventually underperform too.
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Thank you.
__________________
The forest was shrinking, but the Trees kept voting for the Axe, for the Axe was clever and convinced the Trees that because his handle was made of wood, he was one of them.
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