It is the opposite. Market timing does not work reliably. Active management produces worse results on the long run. no individual trader or active manager can consistently beat the market. however active fonds may have periods (even several years) where they out perform.
for private investors buy-and-hold of highly distributed ETFs is the best way to do it. The easiest way to get started is a one ETF portfolio like e. g. Vanguard FTSE All World or SPDR MSCI ACWI IMI. They perform internal rebalancing automatically and you virtually have nothing to do. buy them and don't look at them for the next 20 years.
Noting that it is possible to beat market, with strategies / algorithms that are generally non-public. For example medallion fund, see https://posts.voronoiapp.com/markets/Jim-Simons-Medallion-Fu... . Note that these crazy performance stats are after the steep fixed + performance fees.
Strangely, the other funds operated by the same company and actually open to outside investors, have not performed as well. It is unexplained exactly why.
Acquired.fm has a great episode on RenTec medallion fund vs their institutional funds.
‘David: The way that some folks we talked to described the difference between the institutional funds and Medallion to us is that Medallion’s average hold time for their trades and positions is (call it) a day, maybe a day-and-a-half. Whereas the average hold time for the institutional funds positions is a couple of months.’
From some of their legal settlements it seems a not insignificant part of their advantage is dreaming up obscure illegal tax dodges on short term capital gains that are later revealed as such to keep more funds invested.
It’s possible only in the sense that it is possible to flip a coin heads 10 times in a row. One out of 1024 should do it. But you don’t know which one will until the experiment is over and you look back at the results.
Yep. Statistically, there must be some outlier. Always. And… good luck having the data they use to trade and the money to just enter into the markets they participate in.
for private investors buy-and-hold of highly distributed ETFs is the best way to do it. The easiest way to get started is a one ETF portfolio like e. g. Vanguard FTSE All World or SPDR MSCI ACWI IMI. They perform internal rebalancing automatically and you virtually have nothing to do. buy them and don't look at them for the next 20 years.