Diversification & Some Advice from Spencer Sherman | Q2 2009 Client Newsletter

Please note the publish date of this blog. Financial information, market conditions, and other data mentioned in this post may no longer be accurate or relevant.

How long does it take to master the piano, golf, carpentry, cooking, chess? Most of us would answer years, if not decades. But the field of investing is very different; instead of producing
stellar results the most seasoned investment managers underperform a basic index fund. In fact, just last month Mark Kritzman of MIT released a study showing that only 3% of investment
managers with decades of experience and huge research staffs were able to beat the performance of the S&P 500 index over the 20-year period from January 1989 to January 2009. In other words,
the simple S&P 500 index achieved stardom (96th percentile) by passively selecting stocks. Studies like this have similar findings for virtually every other 10 and 20-year period.

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