quote:
Whoever is saying to just index the S&P and go home is just wrong. That may be what is good for you but it certainly doesn't apply to everyone. If you are going to argue that point why not advocate just buying the index in Emerging Markets? It has a higher long term rate of return. Active and passive each can have their place in a portfolio. An average investor can beat the S&P over the long term with proper diversification and active management (this has a lot to do with the disproportionate effect of losses and gains ie it takes a 100% gain to offset a 50% loss).

S&P isn't the 'best' as nothing is under all scenarios, but it has beaten virtually all money managers over time. Emerging markets,tech and small cap have done even better over time, but they carry much, much more risk within specific time frames. While saying buy the S&P is an oversimplification, I was making the point that even that oversimplification is better than buying mutual funds or stocks from an investment adviser more than 90% of the time.

quote:
Most active funds don't beat the S&P every year, nor do they strive to.

They have no shot of beating it every year, and that's not a problem. The problem is the vast majority don't beat it over time regardless of how diversified or concentrated they are. Again, we can discuss whether S&P 500, total market, mid cap , tech, or some combination would be best for a particular individual, but 'even' the S&P does better over time than over 90% (studies show from 75% to 99%) of money managers.

so I stand by my statement saying buying the S&P is a better decision than paying a money manager or mutual fund....AND there's nothing to say the particular adviser/broker/agent/manager is worth a flip at all. The fact that he passes a series whatever doesn't in any way guarantee he has judgment.

I understand most people don't have the time to learn all of this and the BEST scenario is to find a competent fee based adviser to put them in a mix of ETFs and be done with it, but who's to say the adviser has any idea what he's doing? For these people, a computer based service is probably a MUCH better path that looks at their risk tolerance and allocates their portfolio to a mix of ETFs.

cheers!