Sunday, 22 August 2010

Index funds outperform 98 percent of all funds

A conclusion can be stated if you read many scientific reports that compare index funds and active mutual funds:


  • In 1 year index funds outperform 71 percent of all funds.
  • In 5 years index funds outperform 85 percent of all funds.
  • In 10 years index funds outperform 91 percent of all funds.
  • In 25 years index funds outperform 95 percent of all funds.
  • In 50 years index funds outperform 98 percent of all funds.


Source
M. Dahlqvist, S. Engström och P. Söderlind, Performance and Characteristics of Swedish Mutual Funds, Journal of Financial and Quantitative Analysis, 35:409-423 (2000) (Wikipedia)

Thursday, 20 August 2009

Urban Bäckström, "Funds doesn't beat index"

"In spite of the marketing of mutual funds it is proven in the scientific litterarture that mutual funds does not beat index. And if you count their fees they even is worse than index over time."


Source: di.se
interview with Urban Bäckström, a Swedish economist who is the current CEO of the Confederation of Swedish Enterprise. He is a former Governor of the Bank of Sweden

Thursday, 30 July 2009

Warren Buffet the richest man in the World

The richest man in the World today is Warren Buffet. He lives a simple life without financial excesses. His wealth is supposed to come from stock trading.

But Warren Buffet is in real sense not a trader but an anti-trader.

Warren Buffet
Warren Buffet,
The richest man
in the World
Mr Buffet's investment philosophy is, buy and hold, or maybe, buy and never sell.

A trader buys and sells, but Mr Warren Buffet just buys and buys and that is why you could say that he is not a trader but an anti-trader.

Warren sits like Ferdinand the bull and smells his flowers and awaits the right price on the stocks he has in mind.

In the meantime the traders are galloping around, buying, selling and fetching heart diseases and strokes in dozens.

I really do not have to tell you what sort of funds Mr Warren Buffet recommends? Well, it is of course index funds.


Source:
Warren Buffet invests like a girl
Warren Buffet gives nod to index funds...
Wikipedia on Warren Buffet
Wikipedia on Ferdinand the bull