I’d disagree with the bit at the end though about fund managers needing to trade a lot to justify commissions. At my old shop (large mutual fund) we’d only buy or sell a new name every month or so. Mostly spend the time looking at new ideas and shoot 95% of them down. In fact, portfolio churn is generally looked at in a bad way and is tracked pretty intensely.
Thanks for the input! I get your point, though the data has shown time and again that passive funds perform better than managed ones in the long run. So even a little bit of doing is harmful and yet, it makes the fund more expensive.
Great stuff again. Im reminded of the line that I absolutely love although cant remember who said it but who cares? "dont just do something, stand there!"
This is on point.
I’d disagree with the bit at the end though about fund managers needing to trade a lot to justify commissions. At my old shop (large mutual fund) we’d only buy or sell a new name every month or so. Mostly spend the time looking at new ideas and shoot 95% of them down. In fact, portfolio churn is generally looked at in a bad way and is tracked pretty intensely.
Thanks for the input! I get your point, though the data has shown time and again that passive funds perform better than managed ones in the long run. So even a little bit of doing is harmful and yet, it makes the fund more expensive.
Oh yeah, that’s another matter. After fees the majority of funds underperform their benchmarks. Some still do quite well tho
Great stuff again. Im reminded of the line that I absolutely love although cant remember who said it but who cares? "dont just do something, stand there!"