Hi Christopher, thank you for the very kind words; you are more than welcome to share the videos. I would just ask that if you embed the video into your website that you include a line indicating that the Plain Bagel and your website are not affiliated. Aside from that, feel free to use the videos as you'd like! I'm honoured by the request :)

Actively managed funds underperform passive index funds when taking into account fees. There's no reason you can't do what they do and outperform passive funds.

​@@freshrockpapa-e7799 "There's no reason you can't do what they do and outperform passive funds. " Yeah there is. For one active investor to do better than the index, another investor has to do worse than the index. The AVERAGE returns of active investors before considering fees are identical to those of passive investors. Even if you're an individual active investor, you still have fees when buying and selling, meaning your expected returns are already lower. Now also take into account that you're buying something that someone else is selling and vice versa. If you take into account the fact that 70% of all trades are made by institutions who have way more knowledge and data than you do, and you're trading with these large institutions 70% of the time, how can you possibly hope to come out ahead in those trades? You think you're gonna stick it to the big institutions? Literally the only way you're gonna outperform passive funds is by taking on more (uncompensated) risk. At that point, you may be better off just skipping all pretense and betting all of it in a casino, because that's basically what you're doing anyways.

@@alex2143 "The average returns of active investors are identical to those of passive investors" Nope, completely false. Think about that for 5 seconds, you'll realize why that's false. Index funds buy more of the overvalued companies and less of the undervalued companies, and also buy into all bubbles. Even a mediocre investor could avoid this. Beating the index is trivial, I've been doing it for a decade in both europe and the us, and I'm just an engineer that read a couple books about investing. The issue is that most people confuse picking your stocks with trading, trading is gambling, picking your stocks isn't at all, and there's nothing stopping you from picking your stocks such that you replicate 80% of an index but exclude the companies that obviously aren't viable in the long term and an index fund would eventually sell at a loss (at least in cost of opportunity) eventually. Tl;dr: if you're passively indexed for decades you're doing much worse than stock picking with a strategy of b&h

@@freshrockpapa-e7799 So what kind of stocks do you have in your portfolio, if I may ask? Value, Growth or Dividend stocks? What books have you read?

@@arrowmouse it buys less of the undervalued stocks and more of the overvalued stocks. Do you even know how an index fund works?

Glad you enjoy the channel, thanks for the kind words :)

I certainly agree with aspects of this, but the same argument can be used to justify certain active strategies. For example, plenty of research reports highlight that active mutual funds under perform indices, so by that same logic would that not mean other active strategies (i.e. wrapped accounts) outperform? Since active strategies will net passive performance (before fees), there would be some out performance offsetting this, right? Just a thought, after fees the difference might be negligible but it's an interesting spin on the argument that I've heard before.

@@ThePlainBagel I have no problem with some active strategies outperforming passive investment. What I specifically objected to is the statement that in some market conditions active investors will do better than passive investors. When taking active investors as a whole, there are no such market conditions. I apologize if my comments sound too adversarial: I have seen a handful of your videos and I generally like your explanations, but that bit bothered me.

@@alonamaloh Not a problem, nothing wrong with some healthy debate! I see your point, something to keep in mind for future videos. I appreciate the comment :)

nvm, just searched it up - if anyone wants to know: "But quantitative analysis is not often used as a standalone method for evaluating long-term investments. Instead, quantitative analysis is used in conjunction with fundamental and technical analysis to determine the potential advantages and risks of investment decisions." - Investopedia

Thank you!

THEN TURN YOUR VOLUME UP

thanks Benjamin Graham

Facts, I invest as well as trade. I invest passively as well as actively. I use fundamental analyisis, I use technical analysis, I also use quantitave analysis (tho i currently don't have much knowledge in this area yet). Things are not so black and white, at the end of the day you gotta find what is the best approach according to a lot of factors for you at that time. But i can understand why passive investing has a higher majority. It's easier and most people are not that interested in finance they just want their money to grow (which is a valid argument). But for me all of this has worked beautfully so far