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Jul 7, 2009 4:30 pm

This has been talked about numerous times before, I just read this on Marketwatch.  In an effort to move the focus off of Windy, your thoughts?

 

Paul B. Farrell

Jul 7, 2009, 12:01 a.m. EST

Lazy Portfolios seven-year winning streak Strategy keeps beating S&P 500 as well as popular actively managed funds

By Paul B. Farrell, MarketWatch

ARROYO GRANDE, Calif. (MarketWatch) -- Guess what? Actively managed mutual funds are bad news, filching your hard-earned money.

Year after year they continue their dark legacy, proving what former Sen. Peter Fitzgerald said during his reform fight five years ago: "The mutual fund industry is now the world's largest skimming operation, a $7 trillion trough from which fund managers, brokers and other insiders are steadily siphoning off an excessive slice of the nation's household, college and retirement savings."

The fund industry defeated the senator's efforts. Back then Morningstar's boss Don Phillips added that funds "lost their moral compass." Today it's far worse. Greed drives this industry. The "world's largest skimming operation" has now lost over 50% of America's savings in the decade since the peak of 2000. The track record of actively managed funds during the recent subprime-credit meltdown continues to prove that the industry is failing America.

The only way to invest is with index funds, which make up just 14% of the total. As "Kiplinger's Annual Guide" once said about building index-fund portfolios: "If you're picking from among the best funds to start with, then all you really need for diversification is three stock funds and one bond fund -- and you can forget the other 9,111 funds." Yes, forget about 99.9% of all mutual funds.

As Vanguard's founder Jack Bogle succinctly put it: "Common sense tells us -- and history confirms -- that the simplest and most efficient investment strategy is to buy and hold all of the nation's publicly held businesses at very low cost. The classic index fund that owns this market portfolio is the only investment that guarantees you with your fair share of stock market returns."

A portfolio of index funds does the trick because it's diversified broadly across more than a thousand stocks and bonds in the market.

Let's rumble: lazy investors vs. active-managed competition

Still skeptical? OK, the facts, and a competition. Let's compare the performance of a half dozen of America's most popular actively managed funds touted in ads and the financial press over the years. We'll compare them to our eight Lazy Portfolios. As you do, keep in mind one crucial point: The big sales pitch for actively managed funds is that their managers are supposed to "add value" by beating the market indexes, right? Wrong.

For comparison, we picked six perennially popular funds: Fidelity Magellan, Dodge & Cox Stock, Legg Mason Value, Ja*** Fund, Baron Growth and American Funds' Washington Mutual.

And keep in mind the compensation paid to the managers of America's hot-shot funds typically equals 10 or more times the income of the average American. Unfortunately, as you'll see, they still lost a lot of their investors' money.

By comparison, all eight Lazy Portfolios are already sporting positive average annual returns on a 5-year basis. Plus they also beat all six of the popular actively managed funds on 1-year and 3-year average returns. I repeat: All eight Lazy Portfolios are outperforming every one of these popular actively managed funds. Apparently these actively managed funds exist for only one reason ... to make their managers rich, not their own investors.

First, notice that three of these actively managed funds barely matched the performance of the S&P 500 the past year. In addition, the other three underperformed the S&P 500 by three to seven percentage points.

In short, even though we know that the average compensation of portfolio managers is often $400,000 to more than a $1 million, the hot-shot managers of these actively managed funds provided no value-added to their funds' performance. Conclusion: Their investors would be better off investing in index funds.

Popular funds 1-year return 3-year annualized return 5-year annualized return Fidelity Magellan -33.5% -9.78% -3.51% Dodge & Cox Stock -29.4 -12.7 -2.82 Legg Mason Value -28.2 -18.9 -10.4 Ja*** Fund -25.8 -5.51 -2.02 American Funds Washington Mutual -25.3 -8.53 -2.32 Baron Growth -25.2 -7.83 0.54 S&P 500 -26.2 -8.22 -2.24

As of June 30, 2009

Now, let's compare the performance of those six actively-managed funds to the performance of our eight Lazy Portfolios as of midyear 2009. Notice that all eight Lazy Portfolios beat the benchmark S&P 500 across the board for all three time periods. Yes, the market was in negative territory the past few years, but still all eight Lazy Portfolios outperformed each of the six actively-managed funds.

Lazy Portfolio Number of funds 1-year return 3-year annualized return 5-year annualized return Aronson Family 11 -18.7% -3.06% 2.76% Fund Advice 11 -15.8 -2.18 3.12 Smart Money 9 -15.9 -3.70 1.58 Coffeehouse 7 -15.0 -3.69 1.46 Yale U. 6 -21.8 -5.02 1.72 No-Brainer 4 -19.8 -4.74 1.08 Margaritaville 3 -19.8 -3.03 2.26 Second-Grader's 3 -24.3 -6.07 0.68 S&P 500 -26.2 -8.22 -2.24

As of June 30, 2009

These are midyear numbers. You can also find automatic daily updates at You can also find automatic daily updates at MarketWatch.com/lazyportfolio.

Here's why Lazy Portfolios are a winning strategy. It's based on the Nobel Prize-winning Modern Portfolio Theory: Simple well-diversified portfolios of three to 11 low-cost, no-load index funds that require no active trading, no management. You let them do the work passively without tinkering with allocations. Just add new money from your regular savings to rebalance and build your retirement nest egg.

(Warning: Wall Street bankers and brokers hate the Lazy Portfolio strategy because they can't get rich on index funds, no front-end commissions, no excessive annual management fees).

Six rules for success

Now here's how it works: Six simple rules guaranteed to help you diversify, lower risks, level out bull/bear cycles and generate returns that beat the indexes without buying high-expense actively managed funds or wasting your valuable time playing the market. Customize your own Lazy Portfolio following these six rules and you'll win. More important, you'll have lots of time left to enjoy what really counts, your family, friends, career, sports, hobbies, living.

Market timing is for chumps and chimps. The market's random, irrational and unpredictable. You can't beat it. It loves humbling the mighty. Active trading makes no sense for America's 95 million passive investors, because fees, commissions and taxes kill returns. Besides, Prof. Terrance Odean's research proves: "The more you trade the less you earn." Back in the '90s a chimp throwing darts beat the stock market, made a monkey out of Wall Street. It's easy, you can too.

Frugality, savings versus financial obesity. Tools like starting early, autopilot saving plans, dollar-cost averaging, frugal living and other tricks are familiar to long-term investors. Trust your frugality instincts -- living below your means -- it's a trait common among America's "millionaires next door."

The explosive power of compounding. Albert Einstein, the jolly genius "Man of the Century," says that compounding is the world's most powerful force. Regular savings -- expanding explosively, building on top of itself -- is money power. Start early, with just $100 a month, you can retire a millionaire.

Diversification -- the lost art of being average. Don't be greedy, be average. If you put all your eggs in one basket, like speculative condo-flipping, and it goes belly-up, you end up with a burnt omelet. Dividend reinvestment guru Chuck Carlson's says: "Swing for singles." Just being average wins.

Buy (quality) and hold -- and you'll never sell. Ignore all the latest desperate Wall Street hype about "the death of buy and hold." They want to con you into paying their high fees and commissions. Warren Buffett's favorite holding period is "forever;" his best time to sell is "never!" So ignore Wall Street's "tips," do your homework, buy index funds with the idea you'll never sell, and win.

Do it yourself: The Tortoise consistently beat the Hare. Think long-term: I remember Ric Edelman's amazing research: Millionaires spend less than three hours a month on personal finance, just six minutes a day. So, when you're ready, step up to the starting line and race like a tortoise. Discover how America's slowest, laziest portfolios get you on the road to retirement as a enlightened millionaire.

So that's our little crib sheet on how to build a lazy retirement portfolio. For more info, check out my book, the "Lazy Person's Guide to Investing." This method is so easy even a second-grader can grasp this stuff. In fact, one did, as you'll see at MarketWatch's Lazy Portfolios, where we automatically update all eight portfolios at the end of every trading day.

Do it and have fun knowing that you'll be beating the S&P 500 plus beating America's popular actively managed funds. But whatever you do, please don't spend too much time on investing, not just because it's a waste of time, but because there really are more important things in life: Loved ones, family, mom, dad, best friends, and doing stuff you love, that makes you happy.

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Jul 7, 2009 4:49 pm

I agree. If you are going to invest in mutual funds, why not index funds?



However, I think security selection is extremely important and when you buy is extremely important.



The tests for MPT are like most economic theories and are tested in a vacuum. Also, the percentage of investment returns that asset allocation is responsible for changes as you talk to different people.

Jul 7, 2009 5:27 pm

Conclusion: Their investors would be better off investing in index funds.

Popular funds 1-year return 3-year annualized return 5-year annualized return Fidelity Magellan -33.5% -9.78% -3.51% Dodge & Cox Stock -29.4 -12.7 -2.82 Legg Mason Value -28.2 -18.9 -10.4 Ja*** Fund -25.8 -5.51 -2.02 American Funds Washington Mutual -25.3 -8.53 -2.32 Baron Growth -25.2 -7.83 0.54 S&P 500 -26.2 -8.22 -2.24

As of June 30, 2009

Since I have the numbers handy, let's compare the S&P 500 to Washington Mutual.  Washington Mutual was started on 7/31/1952.  A $100,000 investment would now be worth $46,741,187.  The same investment in the S&P would be worth roughly half of that $24,196,677.   Conclusion: Index fund investors would be better off investing in active funds.   (I think that both conclusions are incorrect and the active vs. passive debate is just plain stupid.)
Jul 7, 2009 6:17 pm

To me, the bottom line is, regardless of which approach you use, is that you have to execute well.  Any knucklehead can buy an index fund, but it doesn't mean it will turn out well (what if someone bought the SPY in 2000 and held for 10 years?).  However, rotating correctly, the correct basket of index funds did alright the past 10 years.  Conversely, you can compare First Eagle Global to Legg Mason Value, and see that FEG crushed Bill Miller's entry.  So I find it stupid when writers pick arbitrary (or not so arbitrary) funds and indexes to use, as it does not necessarily reflect actual investors results.

However, for the complete novice, just picking a well diversified complement of indexes is probably the least likely to screw you up, so long as you stick to it.   One other thing - each of the "Lazy" portfolios above includes a healthy dose of bonds and other asset classes (during the worst 10-year period for equities).  And his actively managed funds are all equity.  So right there it is an incomplete comparison.  If he had compared them from 1995-1999, I bet the result was the exact opposite.  So as someone else mentioned, timing matters.
Jul 7, 2009 6:45 pm

A couple of points.



I like b24 says in evaluating the portfolios you are talking about comparing Washing Mutual(The fund invests in stocks that meet strict standards evolving from requirements originally established by the U.S. District Court for the District of Columbia for the investment of trust funds. May not invest in companies that derive their primary revenues from alcohol or tobacco.) and comparing that to the Yale portfolio(with commodities, reits and other alternative classes).



Second, There is some validity to the performance of passively managed portfolios. Paul Farrell is a windbag with a deadline to meet. Consequently, his columns on Marketwatch are either about his “Lazy Portfolios” or what doom and gloom we are headed for. Farrell is always short on data. His columns back in the late 1990’s, you would have read columns glorifying tech-heavy growth investing. How did that turn out.



However I disagree with Anonymous’ data because lets face it retirees don’t have don’t have 57 years(2009-1952) to find out if that happens again(and not take income from it). Although he maybe be right about the numbers they don’t really apply.



I love how these articles always take famous(or infamous funds) that no one should use and have them be the bench mark and most are based on large cap growth funds. but then compare those results to vanguard’s whole portfolio of funds(real estate, int’l, bonds, commodities). Next thing you know DFA will come back into the mix.

Jul 7, 2009 7:02 pm

[quote=jkl1v1n6]

Now here’s how it works: Six simple rules guaranteed to help you diversify, lower risks, level out bull/bear cycles and generate returns that beat the indexes without buying high-expense actively managed funds or wasting your valuable time playing the market.





Market timing is for chumps and chimps. The market’s random, irrational and unpredictable. You can’t beat it. It loves humbling the mighty. Active trading makes no sense for America’s 95 million passive investors, because fees, commissions and taxes kill returns. Besides, Prof. Terrance Odean’s research proves: “The more you trade the less you earn.” Back in the '90s a chimp throwing darts beat the stock market, made a monkey out of Wall Street. It’s easy, you can too.





[/quote]



Perhaps he has never heard of Jim Simons. who in his Medallion fund has averaged 35% returns(after 5% investment fee and 36% profit fee) and the whole idea of the fund is errors in the system. The fund trades thousands of times a day.

Jul 7, 2009 8:14 pm

[quote=B24]

To me, the bottom line is, regardless of which approach you use, is that you have to execute well.  Any knucklehead can buy an index fund, but it doesn’t mean it will turn out well (what if someone bought the SPY in 2000 and held for 10 years?).  However, rotating correctly, the correct basket of index funds did alright the past 10 years.  Conversely, you can compare First Eagle Global to Legg Mason Value, and see that FEG crushed Bill Miller’s entry.  So I find it stupid when writers pick arbitrary (or not so arbitrary) funds and indexes to use, as it does not necessarily reflect actual investors results.

However, for the complete novice, just picking a well diversified complement of indexes is probably the least likely to screw you up, so long as you stick to it.   One other thing - each of the "Lazy" portfolios above includes a healthy dose of bonds and other asset classes (during the worst 10-year period for equities).  And his actively managed funds are all equity.  So right there it is an incomplete comparison.  If he had compared them from 1995-1999, I bet the result was the exact opposite.  So as someone else mentioned, timing matters.[/quote]

Index annuities have done better than ANY of those strategies.
Jul 7, 2009 8:21 pm

Fast Eddie:

Proof please. Please show us the numbers. JackBlack
Jul 7, 2009 8:24 pm

[quote=JackBlack]Fast Eddie:

Proof please. Please show us the numbers. JackBlack[/quote]

If you care so much, go look it up. I'm not your slave.
Jul 7, 2009 8:29 pm
Squash1:

A couple of points.

I like b24 says in evaluating the portfolios you are talking about comparing Washing Mutual(The fund invests in stocks that meet strict standards evolving from requirements originally established by the U.S. District Court for the District of Columbia for the investment of trust funds. May not invest in companies that derive their primary revenues from alcohol or tobacco.) and comparing that to the Yale portfolio(with commodities, reits and other alternative classes).

Second, There is some validity to the performance of passively managed portfolios. Paul Farrell is a windbag with a deadline to meet. Consequently, his columns on Marketwatch are either about his “Lazy Portfolios” or what doom and gloom we are headed for. Farrell is always short on data. His columns back in the late 1990’s, you would have read columns glorifying tech-heavy growth investing. How did that turn out.

However I disagree with Anonymous’ data because lets face it retirees don’t have don’t have 57 years(2009-1952) to find out if that happens again(and not take income from it). Although he maybe be right about the numbers they don’t really apply.

I love how these articles always take famous(or infamous funds) that no one should use and have them be the bench mark and most are based on large cap growth funds. but then compare those results to vanguard’s whole portfolio of funds(real estate, int’l, bonds, commodities). Next thing you know DFA will come back into the mix.

  To bring it to an even simpler form, I took a quick look at the portfolios.  Thay average about 35% fixed income - mostly short term, TIPS, treasuries, etc.  They also contain small caps, emerging markets, etc.  So what he is comparing are COMPLETELY different portfolios.  And what's more, most of the actively managed funds he chose are funds that people only choose because they are in their 401K's (and most 401K's have crummy options).  So it's easy to say "hey just buy cheap indexes and forget about it".  But I could, in 5 minutes, build a portfolio that approximates the weightings in his "Lazy" portfolios that absolutely crushes them.  And if you exclude ONE year's results in the study, the results are completely different.  And if you use the 90's instead of this decade, his portfolios get crushed yet again. The guy's a big windbag, and one of "them" that convinces ordinary investors that all advisors are bad.
Jul 7, 2009 9:33 pm

I went and built two portfolio's, one with all VanGuard funds and one with active managed funds.  I got the active manged funds via Morningstar's Highest Rated.  I had to substitute a couple because they didn't have long enough time frame.

$100,000 invested on 12/31/1997   Vanguard Portfolio Vanguard GNMA - $10,000 Vanguard Short-term Bond Index - $10,000 Vanguard Interm-term Bond Index - $10,000 Vanguard Value Index - $10,000 Vanguard Growth Index - $15,000 Vanguard Mid Cap Growth - $10,000 Vanguard Small Cap Index - $15,000 Vanguard International Value - $10,000 Vanguard Emerging Mkts Stock Index - $10,000   Active Portfolio SunAmerica GNMA - $10,000 PIMCO Low Duration A - $10,000 PIMCO Total Return A - $10,000 Vanguard Long-Term U.S. Treasury - $1  (using Vanguards hypo and they req'd VG fund) Legg Mason Value C - $10,000 Fidelity Contrafund - $15,000 Hartford Midcap A - $10,000 Baron Growth - $15,000 American Funds Euro-Pac Growth A - $10,000 Dreyfus Emerging Markets A - $10,000   Asset allocation is fairly close, within 4% difference Style box is also within 4-5% Sectors are as close as I am going to get them. Regionally within 3% difference 10 yr Std dev is .76 higher in Vanguard 10 yr Mean 1.33 higher in Active 10 yr Sharpe .09 higher in Active 10 yr Alpha .06 higher in Active 10 yr Beta .03 higher in Vanguard 10 yr R-squared 2 higher in Active   I'd say for the most part these are pretty similar portfolio's.  I also think they could be two portfolio's that a resonable person could assemble.   The difference in ending market value;  Vanguard worth $172,387 and the Active Portfolio worth $202,307.   
Jul 7, 2009 9:33 pm

The problem arguing investments is that everybody’s motive is different (fee based-always get paid regardless of performance, commission-get paid once and never again, % of gains- take more risk to get higher payout, annual fees, no incentive to do anything at all, john bogle- to keep vanguard on top individual investors-blame someone else, day traders- conceal the losses… etc)

Jul 7, 2009 10:05 pm

[quote=jkl1v1n6]

I went and built two portfolio's, one with all VanGuard funds and one with active managed funds.  I got the active manged funds via Morningstar's Highest Rated.  I had to substitute a couple because they didn't have long enough time frame.

$100,000 invested on 12/31/1997   Vanguard Portfolio Vanguard GNMA - $10,000 Vanguard Short-term Bond Index - $10,000 Vanguard Interm-term Bond Index - $10,000 Vanguard Value Index - $10,000 Vanguard Growth Index - $15,000 Vanguard Mid Cap Growth - $10,000 Vanguard Small Cap Index - $15,000 Vanguard International Value - $10,000 Vanguard Emerging Mkts Stock Index - $10,000   Active Portfolio SunAmerica GNMA - $10,000 PIMCO Low Duration A - $10,000 PIMCO Total Return A - $10,000 Vanguard Long-Term U.S. Treasury - $1  (using Vanguards hypo and they req'd VG fund) Legg Mason Value C - $10,000 Fidelity Contrafund - $15,000 Hartford Midcap A - $10,000 Baron Growth - $15,000 American Funds Euro-Pac Growth A - $10,000 Dreyfus Emerging Markets A - $10,000   Asset allocation is fairly close, within 4% difference Style box is also within 4-5% Sectors are as close as I am going to get them. Regionally within 3% difference 10 yr Std dev is .76 higher in Vanguard 10 yr Mean 1.33 higher in Active 10 yr Sharpe .09 higher in Active 10 yr Alpha .06 higher in Active 10 yr Beta .03 higher in Vanguard 10 yr R-squared 2 higher in Active   I'd say for the most part these are pretty similar portfolio's.  I also think they could be two portfolio's that a resonable person could assemble.   The difference in ending market value;  Vanguard worth $172,387 and the Active Portfolio worth $202,307.   [/quote]   None of the active vs. passive matters because it is simply measuring past investment performance.   I don't particularly care about future investment performance either.   INVESTOR PERFORMANCE counts.  Investment performance means squat unless you are a fund manager.
Jul 7, 2009 10:12 pm

Forgot about you Fast Eddie… (insurance guys- aren’t smart enough to get licensed use real investments)

Jul 7, 2009 11:28 pm

[quote=anonymous]Conclusion: Their investors would be better off investing in index funds.

Popular funds 1-year return 3-year annualized return 5-year annualized return Fidelity Magellan -33.5% -9.78% -3.51% Dodge & Cox Stock -29.4 -12.7 -2.82 Legg Mason Value -28.2 -18.9 -10.4 Ja*** Fund -25.8 -5.51 -2.02 American Funds Washington Mutual -25.3 -8.53 -2.32 Baron Growth -25.2 -7.83 0.54 S&P 500 -26.2 -8.22 -2.24

As of June 30, 2009

Since I have the numbers handy, let's compare the S&P 500 to Washington Mutual.  Washington Mutual was started on 7/31/1952.  A $100,000 investment would now be worth $46,741,187.  The same investment in the S&P would be worth roughly half of that $24,196,677.   Conclusion: Index fund investors would be better off investing in active funds.   (I think that both conclusions are incorrect and the active vs. passive debate is just plain stupid.)[/quote]   Good stuff! Those reinvested divs sure add up!   The active versus passive debate will live on.   As will the investment media. Their manifesto "How To Lie With Statistics"    
Jul 8, 2009 12:41 pm

[quote=iceco1d][quote=jkl1v1n6]

I went and built two portfolio's, one with all VanGuard funds and one with active managed funds.  I got the active manged funds via Morningstar's Highest Rated. 

  [/quote]   Whoa there cowboy!  Do you realize the fatal flaw in your comparison?!?!   You picked the active funds by using Morningstar highest rated?  So you admittedly assembled the active portfolio, by using the funds with the highest historical performance?    Do you realize how unscientific, and how slanted that comparison is?   That's like saying, "I'm going to see how good I am at picking football games.  I'm going to go to NFL.com historical stats, and then place bets on the outcomes of games that already happened!"   Want a real comparison?  See what the median and mean returns are for those active funds.  See how many active funds, in each asset class, beat the corresponding Vanguard fund.  Then you'll see how much of a chance you have in selecting those "Highest Rated Funds" BEFORE the returns actually happen.   All you did was assemble an All Star team at the end of the season...no kidding it should win.  Your ability to assemble an equally effective All Star team 1, 3, 5, and 10 years from now, BEFOREHAND, is nil.    Edit:  Not trying to be a d|ck JK.  I think you're a good dude...but that was just a really bad, biased example.[/quote]

No.
The argument is that good managers beat passive management. In the example above, the best managers beat active management. You believe they were just lucky; others believe that good managers have certain characteristics.
Using your sports analogy, could I predict an All-Star team 1, 3, 5 and 10 years out. Well, yes I could, or, at least I could make better assessments than somebody picking at random. Many baseball analysts do a very good job predicting what players will do in the coming years.
It would get dicier the longer out you go, but baseball talent (like money managing talent) is readily identified.

Jul 8, 2009 1:25 pm

I expect that Albert Pujols is going to perform better than the average baseball player over the next 1, 3, and 5 years. 

I can't pick a single fund that I can say that about when we are comparing it to the S&P 500.    I can say that I expect the S&P 500 to outperform the average U.S. Large Cap fund over the next 1, 3, and 5 years.    The fact that the S&P 500 outperforms x% of funds is poor reason to index.  It just means that most funds suck.   Maybe we can pick a better fund over a period of time.  Maybe we can't.  It doesn't matter.  If you have a client who is deciding between your recommendation of XYZ and a S&P 500 fund, does it matter what fund does better over the next five years?  No, unless the client is going to put a lump sum down today and not touch it for five years.  If they move it, the 5 year results won't matter.  Even if they they add to it, the five year results won't matter.   Ex. 5 years ago, Joe bought Active XYZ.  Sam bought Passive Fund ABC.  They both invested $100,000.  Two years ago, they both invest another $200,000.  Over the last 5 years, Passive Fund averaged 5.2%.  Active XYZ averaged 5.1%.   Who now has more money, Joe or Sam?  How much money do they each have? 
Jul 8, 2009 1:31 pm

Passive or active is moot if the client doesn’t want what you’re selling. 

Jul 8, 2009 1:46 pm
Ice, I was hoping you'd chime in here.  Wanted to see where people stood on this issue.  I've now started incorporating both passive and active management into my practice.  It depends on the investor.  Not completely sold on either style personally.   What I did is go out and put together a portfolio that a index investor may use and what an advisor may use.  It is reasonable to say that people when constructing a portfolio will go out and pick the best performing funds in the most recent time period.  Yes, advisors are guilty of it also. 

Interesting to note is that the passive mgt strategy is outperforming the active in the 1yr, 3yr, and 5yr periods.  It is lagging the 10 yr. 3.82% to 5.15%. 

I don't think that it's too far off to say that the funds used in the active portfolio might be found in many portfolio's.  Baron Growth, Hartford Midcap, Contrafund, PIMCO funds, Am Funds EuroPac, Legg Mason Value, those are all funds that have a pretty good reputation and have for a while. 

Basically what I see is depending on how those managers perform over the next 5 years will determine if in 5 years everyone will be touting passive management because of the outperfomance over the lagging 10 years. 
Jul 8, 2009 2:26 pm
"That's a shame.  Because this is no more a debate than whether or not Tylenol is better at relieving headaches than Gas-X.  When you get down to it, there is a clear-cut right & wrong answer."   Can you elaborate on this?  I'm asking because I see nothing clear-cut about it.  (passive vs. active and not tylenol vs. Gas-X.)