January 8, 2019

Outperformance in Down Markets 100% of the Time? #ETF #NIFTYBEES

On almost a daily basis, I’m seeing headlines and hearing emotional pitches about the current dangers of index funds, with warnings about the ways they might harm investors in more volatile or bear markets. With ongoing market drops and large swings, this talk is sure to persist.

I would encourage many of the commentators predicting doom about index funds to tone it down a little, however, (emotion rarely leads to good long-term investing decisions) and, along with investors, to review the following studies.

The studies aren’t perfect, but they do seem to provide useful down-market data.

What do they show?

An S&P Dow Jones report from 2009 might be a pretty good place to start.

This report showed that, “A majority of active funds in eight of the nine domestic equity style boxes” underperformed their appropriate indices in the 2008 down-turn and produced “similar outcomes” in the 2000 and 2002 bear markets.

Read more at https://prestondmcswain.com/2019/01/04/outperformance-in-down-markets-100-of-the-time

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