Reality: According to the quarterly survey of funds for "Quarter 1 2011" by Thames River Multi Capital (TRMC) only 1.3% of funds (16 out of 1,188 funds with a three year track record) made it into the top 25% 3 years in succession.
More tragically, only 8.6% of funds did better than average three years in succession.
Reported by Forbes:
ReplyDeletehttp://www.forbes.com/sites/rickferri/2012/12/20/any-monkey-can-beat-the-market/
"Give a monkey enough darts and they’ll beat the market. So says a draft article by Research Affiliates highlighting the simulated results of 100 monkeys throwing darts at the stock pages in a newspaper. The average monkey outperformed the index by an average of 1.7 percent per year since 1964. That’s a lot of bananas!
What is all this monkey business? It started in 1973 when Princeton University professor Burton Malkiel claimed in his bestselling book, A Random Walk Down Wall Street, that “A blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.”
“Malkiel was wrong,” stated Rob Arnott, CEO of Research Affiliates, while speaking at the IMN Global Indexing and ETFs conference earlier this month. “The monkeys have done a much better job than both the experts and the stock market.”"