The 2 Percent Solution?

Dan Solin in the Huffington Post writes about actively managed versus passive funds in Your Choice: Jim Cramer or William F. Sharpe. He notes that investors following Jim Cramer’s advice would have lost money, and about passive investing notes that “Rick Ferri reached a similar conclusion in his excellent book, The Power of Passive Investing, noting that “Independent studies conclude that a portfolio composed of five actively managed funds has only about a 30 percent probability of beating an all index fund portfolio over 1 year, about 15 percent probability over 5 years, 8 percent probability over 10 years, and just 2 percent over 25 years.””

April 18, 2013