Re:Why Index Funds Are Like Subprime CDOs
by foobarian on Wednesday September 04, 2019 @09:51PM
(#20883199)
Maybe we are wrong about the fact that active fund managers do a poor job? In the same way that mathematical models failed to account for the <1% unlikely event in the 2007 crisis, and predicted everything was just fine, maybe our mental models are not crediting the fund managers with saving our investment from this particular failure mode of passive index funds.
Unfortunately it's not clear how to tell which fund managers would actually be able to succeed at this.
Unfortunately it's not clear how to tell which fund managers would actually be able to succeed at this.