Home Training Weekend reading: Still crazy after all these years

Weekend reading: Still crazy after all these years


What caught my eye this week.

i often worry that we don’t bang the drum enough to passively invest Maneuver these days.

It’s not that we’ve changed our mind that using index trackers is the way forward for most investors. Far from it!

Moreover, if you beat the drum every week, you start to feel like a slave – and ordinary readers start to have a headache.

Maneuver advocated passive investing more than a decade ago, when there was little coverage in the mainstream British media. There is tons of articles in our archives about why and how to do it.

Maybe they should be updated and reissued more often to give them a fresh air?

The trouble with a blog – unlike, say, a book – is that you never know where someone is going to start. The reader may be on his 500th article or his first.

I’m supposed to use our fancy new email system to create a sort of automatic crash course in passive investing for new money subscribers. Watch this space…

For the record, though, unless you have special access, some are rare edges when choosing winning active funds – or you have non-standard goals such as ESG investing or a desire for an unusual return profile – than the evidence supporting index funds has only grown.

Most people accept it nowadays. Even the active manager is redoubted, like the personal finance section Financial Timeswho wrote this week:

In the first six months of this year, nearly two-thirds (60 percent) of actively managed equity funds fell further than the market.

Yes, you read that right.

Actively managed funds — where you pay extra for a team of well-paid fund managers who pick stocks they think will do best — are actually underpowered by passive funds that simply track the nearest comparable index.

There’s also an interesting table showing how active managers have been over ten years.

Note that some clear better-than-average successes – such as the 63% outperformance in the UK market – can generally be explained by factors such as holding smaller companies than the benchmark. (And if so, it could be replicated more cost-effectively by getting broad, low-cost exposure through a tracker fund and combining that with, say, a 20% small-cap allocation.)

However, part of the upside will be a true alpha build by skilled stock pickers. Never think active managers are lazy or stupid!

It’s the other way around, that’s why it’s so hard for them to beat each other. (The math also guarantees worse than average performanceafter fees).

Fine collection

i active stock picker, remember. I don’t think beating the market is myth and magic.

No, there is a difficulty you determine who will beat the market ahead of time.

Get it wrong – as you probably will, statistically speaking – and you’ve wasted 30 years on more expensive funds. As a result, you will retire poorer.

Who needs you to take that risk? Only active fund managers on whom big earnings depend.

So much for remedies – here’s some evidence this week Alpha architect that most of us shouldn’t pick stocks either. Ha hum.

Have a great weekend everyone.

From Monevatar

We have completely renovated ours broker comparison table – Maneuver

From the archiver: there is something to lose – Maneuver


Note: Some links are Google search results – in the PC/Desktop view you can click to read the article without being a paid subscriber. To avoid cookies, try privacy/incognito mode. Consider subscribing if you read them a lot!

Martin Lewis warns households could face £3,500 for electricity this winter – Yahoo Finance

Britain’s financial regulator has published consumer charges for financial services companies – FCA

US GDP falls for second straight quarter; in technical decline – CNBC

UK inheritance tax revenue up 14% year-on-year to £6.1bn – UNS

Pension tax change to boost pay for low earners – Which one

Due to inflation, the average household spends £89 more each month on energy, food and fuel – Guardian

UK car production down almost 20% year-on-year – This is Money

The world has become less motley [Thread] – through Twitter

Products and services

Choosing savings in a period of high inflation [Search result]FEET

What are creditless cards and can they help stop fraud? – Which one

Parents are urged to buy school uniforms earlier due to supply problems – Guardian

Open a SIPP with Interactive Investor and pay no SIPP fees for six months. Conditions apply – Interactive investor

Virgin Money increases its ‘linked’ savings account to record 1.71% – This is money

Energy bill: who is eligible for £400 discount? – Guardian

Problems of rich people: “Should I ditch the Amex Centurion Card?” [Search result]FEET

Seven things to know about the new prepaid funeral plans – Which one

Houses for sale with car charging points, in the photo – Guardian

Comment and opinion

More Hemingway, less Faulkner – Good luck and friction

Knowing what not to do and not doing it are different things – Behavioral investment

Staying Rich – A modest dollar

Fries with that? – Sex Health Money Death

Are children worth the cost? [A couple of week’s old]The root of all

Interview with Escape artist about financial independence [Podcast]This is money

“It’s Different This Time” and Other Investment Mistakes – Darius Faure

How to make your grandson a millionaire on £2,800 a year – This is money

Three keys to successful investing – Roman Investor

What the Fed’s Large Balance Sheet Means for Markets [Podcast, nerdy]Strangers

Spend more mini specials

Another side of investing is The banker is on fire

Why this advisor tells his clients “pension is out of date”Think Advisor

What about the FUN debt? – Budgets are sexy

Naughty corner: Active antics

Howard Marks: I beg to decline [PDF]Oaktree Capital

Bonds attractive after “horror” first half – Bloomberg via Capital management

Buffett’s pension – A modest dollar

A collection of charts that show how markets can confuse you – Connection of advisers

Be thankful for your trading losses – All star maps

There is an ecosystem [US] ETFs trade proprietary products Cathie Wood/ARK – Yahoo Finance

Crypto corner

Tim O’Reilly on comparing Web 3 and Web 2.0 [Podcast]Rational reminder

Kindle books at a discount

The First Minute: How to Start Conversations That Get Results Chris Fanning – £0.99 on Kindle

Thinking Better: The Art of Quick Access author: Marcus du Sotoit – £0.99 on Kindle

Bank on It: How I Destroyed an Industry Ann Boden – £0.99 on Kindle

Amazon Unbound: Jeff Bezos and the Invention of a Global Empire brad stone – £0.99 on Kindle

Environmental factors

Big Oil’s Audacious PR Project To Sow Climate Change Doubts – BBC

Where will the new Sizewell C nuclear reactor get its water? – Guardian

Human pathogens hitchhike on floating plastic – Hakkai

…and many other disadvantages of the world that cleans – BBC

Air conditioning is a climate disaster, and Bill Gates is investing in this startup to fix it – CNBC

Tiny turtle rescued from Sydney beach spent six days stinging ‘pure plastic’ – Guardian

Singapore turns multi-storey car parks into farms – BBC

The Turbulent Future of Deepwater Wind Farms – Hakkai

Outside of us

Remote, hybrid or in-person? – AVC

Mild recessions, wilder careers – Dror Poleg

Tails, you won – Morgan Howell

How robots can help us act and feel younger – IEEE

Pandemic impulse buys we hated – Vox

90% of spreadsheets contain errors – Clement about investments

And finally…

“If you live to have everything, what you have is never enough.”
– Vicky Robin, Your money or your life

Like these links? Sign up to get them every Friday! Please note that this article contains affiliate links, such as from Amazon and Interactive investor. We may receive compensation if you accept these offers, but this will not affect the price you pay.

Source link

Previous articleA fascinating read: the latest investment thinking
Next articleE-Galley Review: Run for Your Honey (Blum’s Bees #3) by Stacey Hart