A Quote by Jonathan Clements

Most investors are pretty smart. Yet most investors also remain heavily invested in actively managed stock funds. This is puzzling. The temptation, of course, is to dismiss these folks as ignorant fools. But I suspect these folks know the odds are stacked against them, and yet they are more than happy to take their chances.

Jonathan Clements

Quote Topics

Actively Against Also Chances Course Dismiss Folks Fools Funds Happy Ignorant Invested Investors Know More Most Odds Pretty Puzzling Remain Smart Stacked Stock Suspect Take Temptation Than Them

Quote Author

Jonathan Clements
British - Author
Born: July 9, 1971

Even fans of actively managed funds often concede that most other investors would be better off in index funds. But buoyed by abundant self-confidence, these folks aren't about to give up on actively managed funds themselves. A tad delusional? I think so. Picking the best-performing funds is 'like trying to predict the dice before you roll them down the craps table,' says an investment adviser in Boca Raton, FL. 'I can't do it. The public can't do it.'

Paul Samuelson

Invest in low-turnover, passively managed index funds... and stay away from profit-driven investment management organizations... The mutual fund industry is a colossal failure... resulting from its systematic exploitation of individual investors... as funds extract enormous sums from investors in exchange for providing a shocking disservice... Excessive management fees take their toll, and manager profits dominate fiduciary responsibility.

David F. Swensen

Most active mutual funds are more interested in collecting fees than in boosting returns for investors.

David F. Swensen

We need a federal government commission to study the way our financial services system is working - I believe it is working badly - and we also need more educated investors. There are good long term low-priced mutual funds - my favorite is a total stock market index fund - and bad short term highly priced mutual funds. If investors would get themselves educated, and invest in the former - taking their money out of the latter - we would see some automatic improvements in the system, and see them fairly quickly.

John C. Bogle

Investors should always keep in mind that the most important metric is not the returns achieved but the returns weighed against the risks incurred. Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.

Seth Klarman

The most common mistakes were investing in money market funds by people who were so scared at the prospect of managing their own funds that they picked the most conservative option, and their investments did not keep up with inflation. The second major mistake was being too heavily invested in their own company's stock, and buying when it was high and there was a lot of optimism about the company, and then having to sell it low when the company got in trouble.

Hedrick Smith

Of course. I favor passive investing for most investors, because markets are amazingly successful devices for incorporating information into stock prices.

Merton Miller

Some investors may grumble about entrepreneurs wanting 'unicorn valuations.' But let's be honest: most investors want them, too, and are supporting the massive capitalization of these companies.

Aileen Lee

It is very hard, if not impossible," he wrote in his study, "to justify active management for most individual, taxable investors, if their goal is to grow wealth." And he said that those who still insist on an actively managed fund are almost certainly "deluding themselves.

Mark Hulbert

Still, I figure we shouldn't' discourage fans of actively managed funds. With all their buying and selling, active investors ensure the market is reasonably efficient. That makes it possible for the rest of us to do the sensible thing, which is to index. Want to join me in this parasitic behavior? To build a well-diversified portfolio, you might stash 70 percent of your stock portfolio into a Wilshire 5000-index fund and the remaining 30 percent in an international-index fund.

Paul Samuelson

With joint-stock corporations, investors can place bets on the success of many different companies, without having to play a central management role in any one of them. This allows investors to diversify their financial holdings. It also allows them to capture profits on their investments, without having to get involved in the dirty, troublesome business of actually running a company.

Jim Stanford

The success of the stock connect program and the increased market volatility means investors are looking for more products to access China markets performance than exchange traded funds, and futures are feeding that rising demand.

Andrew Sullivan

I mean, these good folks are revolutionizing how businesses conduct their business. And, like them, I am very optimistic about our position in the world and about its influence on the United States. We're concerned about the short-term economic news, but long-term I'm optimistic. And so, I hope investors, you know - secondly, I hope investors hold investments for periods of time - that I've always found the best investments are those that you salt away based on economics.

George W. Bush

Skyjackers had a pretty abysmal success rate - once you commandeered a plane in American airspace, your odds of a happy ending were slim. After the epidemic ended in 1973, what folks tended to remember most about the skyjackers was their futility.

Brendan I. Koerner

Governments can and do expropriate investors or discriminate against them. Domestic judicial and administrative systems provide investors with one option for protecting themselves.