Right so that’s exactly what the conversation is recommending against. I’m paying his guy to identify and make good long-term investments, not make knee-jerk decisions because some asshole pooped his pants funny yesterday.
You can check out SPIVA which tracks the people like the guy you’re paying to predict the future.
In all markets the results are consistent. Over a single year a professional has about a 50% chance of beating the average. This probability drops over time and over a 10Y period about 10-14% of professional investors beat the average.
You paying this professional is essentially the same as you thinking that you are able to identify the top 10-15% professional investors. And maybe you just are that great and we should all follow suit. But I doubt it. It’s your risk to take though. No one is going to force you to choose the cheaper option with the better probability to give the best returns.
That is still considered active trading when someone is manually picking which stocks to buy. Historically, passive investing into index funds tends to have outperformed nearly everyone who does individual stock picking based on their own judgement.
Paying someone to manage your investments for you does not mean you’re not an “active” investor. An example of active vs passive investments would be that passive investments usually involve index funds… that is, funds that include virtually “all” stocks and closely resemble the overall performance of the market as a whole.
As opposed to “active” investments which, as just one example, could include using someone to manage your investments if they are picking individual stocks based on whatever their criteria are for what they think is a “good” investment.
SpaceNoodle@lemmy.world 1 month ago
Right so that’s exactly what the conversation is recommending against. I’m paying his guy to identify and make good long-term investments, not make knee-jerk decisions because some asshole pooped his pants funny yesterday.
designated_fridge@lemmy.world 1 month ago
You can check out SPIVA which tracks the people like the guy you’re paying to predict the future.
In all markets the results are consistent. Over a single year a professional has about a 50% chance of beating the average. This probability drops over time and over a 10Y period about 10-14% of professional investors beat the average.
You paying this professional is essentially the same as you thinking that you are able to identify the top 10-15% professional investors. And maybe you just are that great and we should all follow suit. But I doubt it. It’s your risk to take though. No one is going to force you to choose the cheaper option with the better probability to give the best returns.
SpaceNoodle@lemmy.world 1 month ago
Y’all, he’s literally just a financial advisor who’s diversifying my portfolio for me. Fucking chill.
Opinionhaver@feddit.uk 1 month ago
That is still considered active trading when someone is manually picking which stocks to buy. Historically, passive investing into index funds tends to have outperformed nearly everyone who does individual stock picking based on their own judgement.
CatsGoMOW@lemmy.world 1 month ago
Paying someone to manage your investments for you does not mean you’re not an “active” investor. An example of active vs passive investments would be that passive investments usually involve index funds… that is, funds that include virtually “all” stocks and closely resemble the overall performance of the market as a whole.
As opposed to “active” investments which, as just one example, could include using someone to manage your investments if they are picking individual stocks based on whatever their criteria are for what they think is a “good” investment.
SpaceNoodle@lemmy.world 1 month ago
Yes, that is exactly my point. Try re-reading the thread.
threshold_dweller@lemmy.today 1 month ago
Monkeys throwing darts at a dart board would likely outperforn your “guy.” But have fun with that.