re: Investing Advice for a Noob

I believe long term has been pretty much reduced to anything that isn't less than a year.

Its a complicated answer because you aren't comparing one index to one fund. You are comparing the index to all the funds and their individual success rates. You are also considering the fact that the average investor has a minute chance of picking the correct managed fund that will beat an index any given year. Not to mention, that fund that wins in 1995 isn't likely to beat the index in 1996. So now you have the minute chance of picking the correct fund multiplied by the fact the average investor now has to "switch" to another "winning" fund that beats the market in the next year. Hence, the "long term" has basically meant any period of time where statistical luck of the draw can be ferreted out as I understand it. And this time period has basically been brought to a very low amount of time to where at any given time the index is beating any chance of you picking the right fund.

Wall of text.

You're basically arguing for something I either can't understand or cannot be provided to you because it simply doesn't exist. However you define "long term," the indexers say the manged funds lose. Pick whatever time frame, you lose.

Will this always be true? That can't be answered. Obviously, if you were savvy and saw 2007 coming and got out of indexes you won that year. But did you wait until the market got ahead of 2007 levels? Then you lost, which brings up the market timing issue, that again, the average investor has no idea how to handle. And in the 2007 scenario the average investor was more likely to sell closer to the bottom than before the burst I'd imagine.