We
now know that stock and time picking are strategies
that do not work for investors. Manager picking
is also a worthless endeavor; however, there
are still investors out there who think they
can select an all-star manager or financial
guru who can beat the odds. There are many managers
who are willing to try to beat the odds for
their clients or mutual fund shareholders for
a hefty fee. Like all speculators, these managers
do win occasionally, attracting lots of media
attention and new clients.
Step 5 : Program Overview
Statisticians
have stated their case. They need at least
twenty years worth of risk and return data
to establish skill in a manager. The real
problem is choosing those managers at the
beginning of the period. The indexes are
a far better choice for investors because
of their long track records.
