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re: Actively Managed vs. Index Funds

Posted on 4/28/14 at 11:42 am to
Posted by Maderan
Member since Feb 2005
808 posts
Posted on 4/28/14 at 11:42 am to
quote:

Course, in a down market, the fund with the lesser fee will probably be the better bet.


What?? Active management is usually way better in a down market than an index and is where their higher fee is most justified.

I like a blend of both and that is what a lot of institutional money does. Passive is typically better is strong up markets, active is typically better in down markets. In markets without a clear direction (like now) it is a toss up as stock selection in active can either work for you or against you.
Posted by Doc Fenton
New York, NY
Member since Feb 2007
52698 posts
Posted on 4/28/14 at 12:38 pm to
It depends. I think I would tend to agree with matthew25 for most bearish periods. Now for a ridiculous market going into a storm like '29 or '99, that's another story. I know managers sell themselves with the marketing line that they will protect you in down times (hence the "hedge" term), the reality is often different, and I would argue that active management tends to make more sense in a market with a lot of fat prices sloshing around.
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