active vs passive debate

[mathjak107]

all that matters is what works for you , me or anyone else . passive has not done better for me and loads of others . so yeah you can make general statements about anything being supposedly better or worse but at the end of the day it is only your own method that counts .

there are so many variables that go in to our investing that it is almost a silly argument which way is better .

we all buy in at different prices ,we sell at different prices , we reblance at different times with different allocations , different tax situations ,etc etc .

it is like the expense argument . when all is said and done your expenses can be higher but all you needed was a cheaper buy in or better sell point and you win.

i always liken these arguments to the boglehead who buys a car. he pounds the dealer for the lowest price , then beats up the finance guy for the lowest terms. a few years later he is back trading in the car wholesale and buying a new one .

in the mean time grandma paid more , got a bit higher interest rate but sold the car privately for a lot more money-grandma won .

many like myself use dynamic portfolio's . none of our funds have to ever beat an index to win . we use the funds through the sweet spots , swap them for better ones at certain times and repeat .

so the argument about which way is better is almost a strawman argument because of all the factors involved .some of which we do worse or better than others.

most investors don't even see the returns the funds they were in got because of behavioral issues so passive or active in the real world becomes a tiny factor in the bigger picture

[TuborgP]

Originally Posted by mathjak107

that is not the statement you made . you stated it was a proven fact the passive beats active . that is not true. the answer is it depends on the pool of active funds being compared to .

There in lies the problem. Apples and Oranges are being compared. On the one hand you have multiple index funds tied to a variety of benchmark indexes and not just a Total Market Index. Small Caps tied to the Russell etc etc. All tied into measurable targets to match. Then you have individual active mutual funds weighted in sectors but not exclusive to a specific benchmark index. So a small cap active may or may not beat its targeted index but it also may not be pure to that index. Lastly you have the Monitor/Insight folks who are using as a reference not just active funds individually but collectively trying to replicate a targeted goal with comparisons to varied benchmark indexes. Thus the conversation goes all over the place as there really isn't a common discussion. Enjoy your returns and how they compare to the targets in the newsletter and others will enjoy their returns targeted to a designated benchmark.

It would appear this is a discussion amongst the happy with their investment performance crowd.

[mathjak107]

not only that but you have index's measured different ways , take the s&p 500 cap weighted index funds vs uncap weighted index funds .

[jp03]

Originally Posted by jdhpa

Why? I would expect a bear market to be more chaotic / less predictable than a bull market.

But..in a BULL MARKET everybody wins. In a bear market ..I would think thats when knowledge and studying becomes more important. Hell I forgot, its been so long.