Want to Outperform 88% of Professional Fund Managers? Buy This 1 Investment and Hold It Forever.

Motley Fool04-19

While mutual fund managers are well-versed in the markets, they face some extra challenges. And when you factor in at least one big drag on returns, most active mutual funds fall short. ...

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Buy This 1 Investment and Hold It Forever.","media":"Motley Fool","content":"<div>\n<p>While mutual fund managers are well-versed in the markets, they face some extra challenges.\n\n\n\n\n\n\n\nAnd when you factor in at least one big drag on returns, most active mutual funds fall short.\n\n\n\n\n\n\n\n...</p>\n\n<a href=\"https://www.fool.com/investing/2024/04/18/want-to-outperform-88-percent-of-professional-fund/\">Source Link</a>\n\n</div>\n","source":"fool_stock","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Want to Outperform 88% of Professional Fund Managers? 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Buy This 1 Investment and Hold It Forever.\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-19 07:33 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2024/04/18/want-to-outperform-88-percent-of-professional-fund/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>While mutual fund managers are well-versed in the markets, they face some extra challenges.\n\n\n\n\n\n\n\nAnd when you factor in at least one big drag on returns, most active mutual funds fall short.\n\n\n\n\n\n\n\n...</p>\n\n<a href=\"https://www.fool.com/investing/2024/04/18/want-to-outperform-88-percent-of-professional-fund/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"IE00BKDWB100.SGD","symbol_name":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5H\" (SGDHDG) ACC","start_time":0,"source_url":"https://www.fool.com/investing/2024/04/18/want-to-outperform-88-percent-of-professional-fund/","article_id":"2428684381","we_media_id":null,"thumbnails":["https://g.foolcdn.com/image/?url=https%3A%2F%2Fg.foolcdn.com%2Feditorial%2Fimages%2F772738%2Fgettyimages-wall-street-street-sign.jpeg&op=resize&w=165&h=104"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2428684381","pubTimestamp":1713483180,"sourceInfo":{"source_id":"fool_stock","name":"Motley Fool"},"weMediaInfo":null,"summary":"You don't have to be a stock market genius to outperform most pros.","collect":0,"end_time":0,"defaultTopTitle":"fool.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"IE00BKDWB100.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5H\" (SGDHDG) ACC","IVV":"标普500指数ETF","BK4559":"巴菲特持仓","SSO":"两倍做多标普500ETF","LU0648001328.SGD":"Natixis Harris Associates US Equity RA SGD","IE00B1BXHZ80.USD":"Legg Mason ClearBridge - US Appreciation A Acc USD","VOO":"Vanguard标普500ETF","BK4550":"红杉资本持仓","BK4588":"碎股","LU0048573561.USD":"FIDELITY AMERICA \"A\" (USD) INC","LU0417517546.SGD":"Allianz US Equity Cl AT Acc SGD","LU0971096721.USD":"富达环球金融服务 A","LU1074936037.SGD":"JPMorgan Funds - US Value A (acc) SGD","SDS":"两倍做空标普500ETF","SH":"标普500反向ETF","LU0256863811.USD":"ALLIANZ US EQUITY \"A\" INC","LU0130102774.USD":"Natixis Harris Associates US Equity RA USD","BK4581":"高盛持仓","BK4504":"桥水持仓","LU0742534661.SGD":"Fidelity America A-SGD (hedged)","SPXU":"三倍做空标普500ETF","BRK.A":"伯克希尔","IE00B775SV38.USD":"NEUBERGER BERMAN US MULTICAP OPPORTUNITIES \"A\" (USD) ACC","IE00B1XK9C88.USD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A\" (USD) ACC","BRK.B":"伯克希尔B","IE00B3S45H60.SGD":"Neuberger Berman US Multicap Opportunities A Acc SGD-H","LU0234570918.USD":"高盛全球核心股票组合Acc Close","UPRO":"三倍做多标普500ETF","BK4176":"多领域控股","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","SPY":"标普500ETF","LU0980610538.SGD":"Natixis Harris Associates US Equity RA SGD-H","LU1201861249.SGD":"Natixis Harris Associates US Equity PA SGD-H","OEX":"标普100","LU0640476718.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQ \"AU\" (USD) ACC","FDN":"First Trust Dow Jones Internet I","OEF":"标普100指数ETF-iShares","BK4585":"ETF&股票定投概念","LU0234572021.USD":"高盛美国核心股票组合Acc","LU1914381329.SGD":"Allianz Best Styles Global Equity Cl ET Acc H2-SGD","BK4534":"瑞士信贷持仓","BK4533":"AQR资本管理(全球第二大对冲基金)","LU1571399168.USD":"ALLSPRING GLOBAL LONG/SHORT EQUITY \"IP\" (USD) ACC","LU0251142724.SGD":"Fidelity America A-SGD","LU1363072403.SGD":"Fidelity Global Financial Services A-ACC-SGD","LU0149725797.USD":"汇丰美国股市经济规模基金","LU1280957306.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQUITIES \"AUP\" (USD) INC",".SPX":"S&P 500 Index","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC"},"translate_title":"想跑赢88%的专业基金经理？买下这1笔投资，永远持有。","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"VOO":0.9,"SPY":0.9,"BRK.B":0.9,"BRK.A":0.87,"FDN":0.87,"OEF":0.6,"OEX":0.6,"SDS":0.6,"SH":0.6,"SPXU":0.6,"SSO":0.6,"UPRO":0.6,"ESmain":0.6,"IVV":0.6,".SPX":0.6},"content_text":"While mutual fund managers are well-versed in the markets, they face some extra challenges.\n\n\n\n\n\n\n\nAnd when you factor in at least one big drag on returns, most active mutual funds fall short.\n\n\n\n\n\n\n\nYou can outperform most professionals with a simple strategy suggested by Warren Buffett.\n\nYou might not think it's possible to outperform the average Wall Street professional with just a single investment. Fund managers are highly educated and steeped in market data. They get paid a lot of money to make smart investments.But the truth is, most of them may not be worth the money. With the right steps, individual investors can outperform the majority of active large-cap mutual fund managers over the long run. You don't need a doctorate or MBA, and you certainly don't need to follow the everyday goings-on in the stock market. You just need to buy a single investment and hold it forever.That's because 88% of active large-cap fund managers have underperformed the S&P 500 index over the last 15 years thru Dec. 31, 2023, according to S&P Global's most recent SPIVA (S&P Indices Versus Active) scorecard. So if you buy a simple S&P 500 index fund like the Vanguard S&P 500 ETF (VOO -0.23%), chances are that your investment will outperform the average active mutual fund in the long run.Image source: Getty Images.Why is it so hard for fund managers to outperform the S&P 500?It's a good bet that the average fund manager is hardworking and well-trained. But there are at least two big factors working against active fund managers.The first is that institutional investors make up roughly 80% of all trading in the U.S. stock market -- far higher than it was years ago when retail investors dominated the market. That means a professional investor is mostly trading shares with another manager who is also very knowledgeable, making it much harder to gain an edge and outperform the benchmark index.The more basic problem, though, is that fund managers don't just need to outperform their benchmark index. They need to beat the index by a wide enough margin to justify the fees they charge. And that reduces the odds that any given large-cap fund manager will be able to outperform an S&P 500 index fund by a significant amount.The SPIVA scorecard found that just 40% of large-cap fund managers outperformed the S&P 500 in 2023 once you factor in fees. So if the odds of outperforming fall to 40-60 for a single year, you can see how the odds of beating the index consistently over the long run could go way down.What Warren Buffett recommends over any other single investmentWarren Buffett is one of the smartest investors around, and he can't think of a single better investment than an S&P 500 index fund. He recommends it even above his own company, Berkshire Hathaway.In his 2016 letter to shareholders, Buffett shared a rough calculation that the search for superior investment advice had cost investors, in aggregate, $100 billion over the previous decade relative to investing in a simple index fund.Even Berkshire Hathaway holds two small positions in S&P 500 index funds. You'll find shares of the Vanguard S&P 500 ETF and the SPDR S&P 500 ETF Trust (NYSEMKT: SPY) in Berkshire's quarterly disclosures. Both are great options for index investors, offering low expense ratios and low tracking errors (a measure of how closely an ETF price follows the underlying index). There are plenty of other solid index funds you could buy, but either of the above is an excellent option as a starting point.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2428684381"}