Why Investors Should Keep it Simple

Unlike fund managers, everyday investors don't need to consistently outperform rivals, they just need to take logical investment decisions

John Rekenthaler 19 April, 2018 | 8:32AM

ABC Investing

Professional investment managers who have time, resources, and high financial rewards on their side, should be able to outperform 99.9% of their amateur peers, at a bare minimum.

That they probably can. The problem is, outdoing 999 of 1,000 rivals doesn’t get a fund manager very far. If there are 10 million involved investors, then that 1-in-1000 camp possesses 10,000 members. Having the insight to invest simply used to suffice for fund managers. Being a poor man’s Warren Buffett was plenty. Today, there are too many managers who fit that description.

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About Author

John Rekenthaler

John Rekenthaler  is vice president of research for Morningstar.

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