The point everyone in the active/passive debate appears to be
missing, is that the issue at hand is not whether active is better than
passive. That has been settled. The real issue at hand is nothing more
than the basic calculus of every investment choice we have to confront. Is
what I’m gaining from the decision I’m about to make more valuable and
important to me than what I’m losing? If I do this, what's the most
likely worst-case outcome — and could I live with it if it happens?
Like moths we are instinctively drawn to the light of what's working.
But light can blind as well as inform. The demise of indexing, if and
when it actualizes, will not be the result of some internal weakness or
flaw in its infrastructure; it will be because we overused it, abused it
and expected far too much from it.
Excerpted from my latest column at ThinkAdvisor.
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment