Re: Why Mutual Funds are better than Index Funds
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You can take any type of index fund for any investment style and find at least a couple of superior mutual funds.
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Sure, and if you have a thousand people flip a coin 8 times, one is likely to get all heads. There are enough funds out there that it would be quite surprising if some didn't seem to consistently beat the market.
The real test is whether those funds are more likely than other funds to continue to beat the market. They don't. If you take funds which outperformed from 1993-2003 and compare them to underperforming funds from that period, which would you predict would do better in 2004? Turns out they're about the same.
Luck plays a far larger role in stock picking success than most would like to admit.
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