Lowell Herr's  Instablog

To find this series of articles, go to the right-hand sidebar of my blog and use the pull-down Categories menu. Click on Passive vs. Active to bring up the first post that focuses on Section One of the article.

The Active vs. Passive article is broken into twelve sections and I am writing a blog post related to each section.

Even before I finish all 12 blog posts, I've come to the conclusion that the Active vs. Passive debate will never be answered as the data will never be made available to conduct the research, and even if the data were available, the data entry and analysis would be so time consuming as to make it nearly impossible to complete. For this reason, the answer to the question, "Does Passive Outperform?" falls back on the individual investor to correctly measure the return of their portfolio and an appropriate benchmark. Both measurements are essential. Then add in a method for measuring portfolio risk. I strongly advocate using a semi-variance calculation for calculating the portfolio uncertainty. The Retirement Ratio is one such example.

"For every Warren Buffett there are ten Charlie Steadman's."

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.