Why—in the face of such overwhelming evidence to the contrary—do investors and managers continue to believe they will outperform markets? 1) Fees: Investors collectively spend around $100 billion per year trying to beat the market. 2) Overconfidence: Investors are living in a fairy tale world where everyone is strong, good-looking and an above-average stock picker. But two of the world’s most sophisticated institutions are waking up to the fact active management has failed them. Shouldn’t you?
Stocks have advanced under Republican, Democratic, and mixed control of Congress. The evidence favors staying invested and diversified over reacting to elections.
Separately managed accounts offer direct ownership of individual securities, which can create added tax-management opportunities for investors whose circumstances warrant it.
New market highs can feel unsettling, as if stocks can’t climb any higher. But history shows something different. We look at the data, and why staying the course is key.
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