A Professor Who Was Right About Index Funds All Along
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Re: A Professor Who Was Right About Index Funds All Along
#2Being lucky doesn't explain the existence of Renaissance Technologies[1], one of the very first quant fund companies, which has averaged a 71.8% annual return from 1994 through mid-2014. In fact, "the fund’s worst year was a 21 percent gain, after subtracting fees". Of course, it's very much of an outlier — just like Facebook / Google / Uber, if we retrospectively see startup funding and hedge fund investing.
Re: A Professor Who Was Right About Index Funds All Along
#3Brazilian banks have been offering these for decades. It's astonishing that this could be a novelty in the US.
Re: A Professor Who Was Right About Index Funds All Along
#4Brazilian banks have been offering these for decades. It's astonishing that this could be a novelty in the US.
If you read the article, you would have seen that those have existed in the US for 40 years.
Re: A Professor Who Was Right About Index Funds All Along
#5Brazilian banks have been offering these for decades. It's astonishing that this could be a novelty in the US.
The article mentions the Vanguard 500 Index fund and states that it launched 3 years after 1973. So it's hard to understand what you mean when you call it a novelty in the US.
(without being deeply familiar with the history, I think the Vanguard 500 fund must have been one of the earliest index funds anywhere, if not the very first)
Re: A Professor Who Was Right About Index Funds All Along
#6Being lucky doesn't explain the existence of Renaissance Technologies[1], one of the very first quant fund companies, which has averaged a 71.8% annual return from 1994 through mid-2014. In fact, "the fund’s worst year was a 21 percent gain, after subtracting fees". Of course, it's very much of an outlier — just like Facebook / Google / Uber, if we retrospectively see startup funding and hedge fund investing. [1]: ht…
The point is not that all human-picked funds/portfolios perform worst than index funds, but that most of them do.
Re: A Professor Who Was Right About Index Funds All Along
#7Being lucky doesn't explain the existence of Renaissance Technologies[1], one of the very first quant fund companies, which has averaged a 71.8% annual return from 1994 through mid-2014. In fact, "the fund’s worst year was a 21 percent gain, after subtracting fees". Of course, it's very much of an outlier — just like Facebook / Google / Uber, if we retrospectively see startup funding and hedge fund investing. [1]: ht…
The point of index funds isn't that at any moment in time no one can have a market beating strategy. The point of index funds is that by definition the bulk of the market can't have above average returns. So as a retail investor your best bet is to just find a cheap way to ride the average of the market.
Re: A Professor Who Was Right About Index Funds All Along
#8Being lucky doesn't explain the existence of Renaissance Technologies[1], one of the very first quant fund companies, which has averaged a 71.8% annual return from 1994 through mid-2014. In fact, "the fund’s worst year was a 21 percent gain, after subtracting fees". Of course, it's very much of an outlier — just like Facebook / Google / Uber, if we retrospectively see startup funding and hedge fund investing. [1]: ht…
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Re: A Professor Who Was Right About Index Funds All Along
#9Being lucky doesn't explain the existence of Renaissance Technologies[1], one of the very first quant fund companies, which has averaged a 71.8% annual return from 1994 through mid-2014. In fact, "the fund’s worst year was a 21 percent gain, after subtracting fees". Of course, it's very much of an outlier — just like Facebook / Google / Uber, if we retrospectively see startup funding and hedge fund investing. [1]: ht…
Luck can be the actual explanation.
By the law of the large numbers, some funds will be a success for quite some time. Just as some people do win the lottery.
I don't think it's surprising that a couple of funds have a great track history even if the game is just pure luck.
Re: A Professor Who Was Right About Index Funds All Along
#10Being lucky doesn't explain the existence of Renaissance Technologies[1], one of the very first quant fund companies, which has averaged a 71.8% annual return from 1994 through mid-2014. In fact, "the fund’s worst year was a 21 percent gain, after subtracting fees". Of course, it's very much of an outlier — just like Facebook / Google / Uber, if we retrospectively see startup funding and hedge fund investing. [1]: ht…
Renaissance Tech is an interesting read.
Here's a couple of stand out items I cherry picked for no particular reason what-so-ever...
According to the Center for Responsive Politics, Renaissance is the top financial firm contributing to federal campaigns in the 2016 election cycle, donating $33,108,000 by July.[33] By comparison, over that same period sixth ranked Soros Fund Management has contributed $13,238,551.[33]
On 25 September 2008, Renaissance wrote a comment letter to the Securities and Exchange Commission, discouraging them from implementing a rule change that would have permitted the public to access information regarding institutional investors' short positions, as they can currently do with long positions. The company cited a number of reasons for this, including the fact that "institutional investors may alter their trading activity to avoid public disclosure".[32]