Passive indexing will likely disappoint

The ASX 200 equity index is the same price as it was 2 years ago.

How are your passive, indexed ETF returns working out?

What if various equity indices are flat for many years to come?

This is also applicable to those index-hugging fund managers too.

(after all, if you stay close to the index, you get to keep your job)

Timing the market (and using probability) is what professional investors apply their skills towards, every day of every year.

At this particular time, I hope investors are not ingesting that old financial services line, “it’s time in the market and not timing the market’.

That line is often accepted by many as an excuse for their lack of attention towards prices and valuations in the capital markets.

Conversely, when it comes to buying or selling residential real estate or the purchase of a car or an airplane ticket, we become suddenly ‘market timers’ and we’ll tell anyone who is listening how good we are.

April 23, 2023

by Rob Zdravevski

rob@karriasset.com.au