Terry Smith's Fundsmith beat the market for a decade, then trailed four straight years. £3.31bn fled in 2024. Most investors lost money vs a tracker. Why? Timing. They bought high after stellar returns, sold low during underperformance. Jack Bogle's iron law: money arrives after gains, leaves during losses. Even star managers can't beat that.
The so-called stock-picker’s market is a myth that fund managers use to justify their fees, whatever the market does. Decades of data show that even when conditions should favour active managers, most still underperform. The evidence is clear: simplicity, not stock-picking, wins in the long run.
Robin Powell
Oct 239 min read
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