Q. I don't know how to invest and want to find a money manager to help me manage my investment and beat the market, how to find the best one?
A. Unfortunately that best money manager is a very illusive concept, and doesn't exist in the real world.
While every year there are many money managers beat the market performance, there is no money manager has been able to beat the market every year, and even you back up to just want to find a money manager who has a higher chance of beating the market, the odds are low.
Here is a classic example - Bill Miller used to be the "Best Fund Manager" at Legg Mason, he managed to beat the S&P 500 index 15 years in a row.
However, the next 10 years, his performance put him to the bottom 1% of all funds in his fund's category.
The bottom line? Don't chase star performers, instead, find out what you need in terms of return, then find the way to increase your chance of achieving that return without incurring too much risk. One simple way is to invest in low cost index funds.
A. Unfortunately that best money manager is a very illusive concept, and doesn't exist in the real world.
While every year there are many money managers beat the market performance, there is no money manager has been able to beat the market every year, and even you back up to just want to find a money manager who has a higher chance of beating the market, the odds are low.
Here is a classic example - Bill Miller used to be the "Best Fund Manager" at Legg Mason, he managed to beat the S&P 500 index 15 years in a row.
However, the next 10 years, his performance put him to the bottom 1% of all funds in his fund's category.
The bottom line? Don't chase star performers, instead, find out what you need in terms of return, then find the way to increase your chance of achieving that return without incurring too much risk. One simple way is to invest in low cost index funds.
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