Index over Active Management Still Requires Discipline

The inevitable periods of underperformance often suffered by active managers—coupled with their relatively high fees—make index investing a more attractive option for many investors. This according to a recent Globe and Mail article by Validea CEO John Reese. Reese writes, “By Mr. Buffett’s reckoning, investors have lost out on $100 billion in fees and underperformance over the years.” The movement to index investing, he argues, is “up-ending the asset management industry.” Still, according to Reese, investors should exercise discipline when choosing index funds, as such funds can also suffer long periods of low returns. Investors can find good active managers, […]