Broker Check

The Myth of the Successful Money Manager

| October 29, 2013

The Myth of the Successful Money Manager . . . (

“If you pay someone to invest your money, it’s because you think that they can get better returns than you can. The reality, however, is that having your money actively managed by an expert is, on average, worse than just putting it into an index fund that tracks movements in the stock market as a whole.

My Comment

The key and operative word in the above quote is “actively.” The statement above is supported by a lot of research which is cited at the link. However, just because you’ve correctly figured out that passive (not precisely, but similar to indexing) is the way to go, the job is not yet finished. Which passive funds? How much of each? Answer, of course, depends on your specific situation. And, as a Certified Financial PlannerTM (CFP® ) Professional, it is my professional opinion that a great number of investors are better served by (1) Having a written Financial Plan . . . (2) Updated periodically to match your current circumstances . . . (3) by a Financial Professional.