Are Star Fund Managers Worth Your Buck?
Well, the short answers is probably no. Fund managers usually ‘sell’ actively managed investment products, which are sold at a premium compared to passively managed investment products. Now, these higher fees may be worth it if you can consistently beat the market by a good margin, yet, the problem lies exactly there, in the consistency factor. Research shows that there is just a 3% probability of beating the market in the long term.
That said, without a doubt, the financial world is blessed with brilliant investors with many funds (as much as 2,140 according to this guy). Warren Buffett is an obvious contender, yet, the names of Benjamin Graham, John Templeton, and Peter Lynch will be a familiar call of stock geeks. Also, So the bottom line? It’s not impossible, yet, very unlikely.
Image Credit: CC PD
About the image: Courtyard of the Euronext Amsterdam (or Beurs van Hendrick de Keyser in Dutch), the world’s first formal stock exchange. The first formal stock market in its modern sense, was a pioneering innovation by the VOC managers and shareholders in the early 1600s.