What has a better investment return, passive money management or active money management?
This was selected as Best Answer Depends entirely which statistical base you decide to call down to prove your point. No doubt several of your answers will use differing data sets to “prove” their preference. The mathematical thesis is fairly straightforward – though not perhaps in the way you might think. If you look at a basic principle of risk taking, the “risk-reward” principle, you’ll see that the greater the degree of risk taken, the greater the *possibility* of either reward or loss. However, since in financial markets “each investor’s return depends on what other investors will pay for assets at some point in the uncertain future”, all we can ever be sure of is that some punters will make more than others. This may run contrary to what various Active Fund managers will tell you. My personal experience, as both a marketer and consumer of active fund management, is that it mainly benefits traders’ commissions. If by “active management” you also include active shareholder interven
