(cont'd from yesterday's post)
The hedge fund manager, Ted Seides, who competed against the S&P 500 in Warren Buffett's famous bet, conceded the game in September of 2017. His company's expertly-managed investments were only able to gain 2.2% per year (years 2-10) compared to the S&P 500's average of 7%. That's huge.
"That means Seides’ $1 million hedge fund investments . . only earned $220,000 in the same period that Buffett’s low-fee investment gained $854,000."
Much of that enormous difference results from the fees that hedge fund managers charge. But the cost of an average index fund is way smaller. Buffett's comment to his shareholders: "Performance comes, performance goes. Fees never falter."
What if you had invested $100,000 over the past ten years, 2011-2020? Here's a summary of what actually happened so you can make a recent comparison:
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