ACTIVE MANAGEMENT FAILS TO DELIVER

The dramatic decline in the stock market that began exactly two years ago today has renewed the debate about the virtues of active vs. passive investment management.

An article in yesterday’s Wall Street Journal adds to the evidence that active managers fail to beat the indexes they use as their benchmarks. A study by Morningstar indicates that active managers were even less effective when their performance was measured on a risk adjusted basis. Only 37% of actively managed funds outperformed their indexes on a risk-, size- and style-adjusted basis over three, five and ten year periods.

Here’s a link to the article: http://online.wsj.com/article/SB125496189450072189.html

We remain firmly committed to our low cost passive approach to investment management. Our advisory fees are 0.75%. The internal expenses inside our model portfolios are consistently less than 0.25%. All in, clients pay less than 1%.