Active managers claim is that they will beat the indexes, since their funds build up cash during a market drop. They’re also supposed to be able to pick the stocks that will hold up better during declines, as they are earning their pay, right?
They’re Not Trying to Outperform. Last year, 58% of all actively managed funds lost more in value than the benchmark they measure themselves against, reports Morningstar. Many say that that is around the same as chance.
Instead of trying to beat the market, why not just buy the market and save yourself the headache?
To learn more about ETFs and how you can use them, you can either purchase our book, iMoney: Profitable ETF Strategies for Every Investor or visit our education page.