We all know what active managers do, don't we?
Tuesday 18 November 2008
I often talk about active management on the basis that investors have a clear understanding of what that means… firstly here’s the glossary.
Active management does work. The fund manager or stockbroker, picking and choosing the right investments at the right time, does work. You can look at any league tables and they will show how some manager somewhere has outperformed passive management.
The issue is how do you find and pick that fund manager in advance? What processes do you use to know which manager will be the next star!
That is difficult.
What fund managers, on a year by year basis, have consistently outperformed everyone else? Do you know any?
It is not like picking the winners from professional sports, such as golfers and tennis players. If you are in the top 10 in the world in these sports you stand a good chance of consistently winning. The key word here is consistently.
Unless you have a sure fire way of picking the right funds, the right shares, the right fund managers in advance, consistently, why take those risks?
But you may say that’s why you use an adviser to pick these active managers for you. It sounds plausible doesn’t it, but ask yourself this question. If a fund manager spends 100% of his or her time trying to outperform the market, how can an adviser, who spends significantly less than 100% of their time looking at which funds and managers to choose from, know which of those managers is the right one?
posted by Murray Round Wealth Management @ 11:27,
The Authors
Nicholas Round
Nic is the Managing Director of Murray Round Wealth Management Limited, who seeks to ensure the advice provided is truly independent. Based in Shropshire with clients local, national and worldwide, Nic has strived to find the best possible service for his clients needs, by researching and studying the market, trends and philosophies. Nic strongly believes Asset Class Management will bring his clients Financial Freedom, Independence and Happiness.
Kirsty
Kirsty is our communication guru. Managing information requires considerable due diligence and her passion for organisation gives the clarity we all seek. From Shropshire, with a Psychology Degree and much travelling, she is now back in Shrewsbury...and London often, keeping us all at Murray Round focused.
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