Also, the system does need some active management—passive investors are freeloading and not aiding price discovery, so if the whole market went passive then active investment would win handily.
The kind of people who do well at price discovery are big banks with complex computer models and expert analysts. Why do you think that an individual has a got chance at playing that game?
The company I work for manages about a hundred billion dollars in our various funds. We cater to retail clients. I don’t pick stocks myself—a bunch of people with three computer screens and Bloomberg subscriptions down in the financial district do that. I simply take the resulting mutual funds and sell them to people(and do a hundred other things—the investment side is probably the easiest part of my job).
The kind of people who do well at price discovery are big banks with complex computer models and expert analysts. Why do you think that an individual has a got chance at playing that game?
The company I work for manages about a hundred billion dollars in our various funds. We cater to retail clients. I don’t pick stocks myself—a bunch of people with three computer screens and Bloomberg subscriptions down in the financial district do that. I simply take the resulting mutual funds and sell them to people(and do a hundred other things—the investment side is probably the easiest part of my job).