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Mar 1, 2022Liked by Joachim Klement

Hard to argue excl the last 12 months. I think the worm has turned. More index in global bonds (more US, Japan, Italy and Spain), more global equities (very expensive US - even after recent falls) - no thank to both. Index EM anything??? There is certainly a place for indexing, however now more than ever....now is NOT the time. In my humble opinion at least :-(

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The main driver, of course, remains the fact that active managers have continued over very long periods of time to underperform their index benchmarks. In addition, just picking funds with great five and ten-year track records has not worked as past performance has truly not been a good predictor of future relative performance. In fact, statistically speaking, the best predictor of future good relative performance in aggregate has been low fees. That said, every time the market gets jumpy, you can count on hearing the words, "I think it is now a 'stock-pickers' market. You can no longer just jump on index funds with your money." Right. S/

Although it is tempting so choose active management in small caps and emerging markets - high transaction costs - and fees - seem to eat up any perceived inefficiencies. I always remember Jack Bogle's words that indexing is like playing the game at par every time.

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