The evidence banks don’t want you to know: Active vs Index Investing in Belgium [018]

The FIRE Belgium Show

Over the last 20 years, the stock market went up by 500%!! *

1000 euros invested 20 years ago could have become 6000 today. That’s insane.

But you know what’s even crazier… and very sad…

The vast majority of investors only got a tiny piece of this growth.

In fact, the average investor investing in the stock market barely managed to get 100% return over the same period. The average investor that had invested 1000 euros 20 years ago, would have 2000 euros today.

That’s a difference… and a loss of 400%.

4000 euros in this case, but much much larger sums for most people.

In this episode, we review the 5 biggest reports and studies that explore Active vs Passive Investing so that we can better understand

- The difference in performance between active and passive investing

- Why there such a enormous gap in performance

- What we (individual investors) can do about it

If you’re curious about

- How evidence-based investing works

- How to maximize your chance of having high investment returns

- How active and passive investing compare

Then this episode is for you.

And if you know anyone who is investing with bank funds (including pillars 2 and 3 pension funds), then share this episode with them.

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*The S&P 500 went up 500% over the past 2 decades. The average investor in the meantime only got 100%. And this is before inflation. Source: JP Morgan Guide to the Markets.

Links mentioned in the episode:

DALBAR QAIB Studies:

https://www.dalbar.com/QAIB

https://www.ifa.com/articles/dalbar_2016_qaib_investors_still_their_worst_enemy

JP Morgan Guide to the Markets:

https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/insights/market-insights/guide-to-the-markets/mi-guide-to-the-markets-us.pdf

SPIVA Scorecard:

https://www.spglobal.com/spdji/en/research-insights/spiva/spiva-library/

Morningstar Active vs Passive Barometer:

https://www.morningstar.com/en-uk/lp/european-active-passive-barometer

ESMA Costs and Performance of EU Retail Investment Products:

https://www.esma.europa.eu/sites/default/files/2023-12/ESMA50-524821-3052_Market_Report_on_Costs_and_Performance_of_EU_Retail_Investment_Products.pdf

The Academic Advantage:

https://www.ifa.com/pdfs/the-academic-advantage.pdf

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