Home' Trinidad and Tobago Guardian : December 14th 2014 Contents SBG10 STOCKS
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt DECEMBER 14 • 2014
The ANSA McAL Group of Companies is seeking to recruit a
high-performing, suitably qualified General Manager for the
City of Grand Bazaar.
The City of the Grand Bazaar is the largest shopping complex in
the Caribbean. The General Manager reports directly to the
Executive Chairman and manages all facets of the Grand Bazaar
Shopping Plaza, providing a safe, clean and fully functional
facility for shoppers and tenants.
The General Manager is responsible for the management of 30
staff in the areas of security, operations, maintenance and
The successful candidate must have strong leadership and inter-
personal skills, professional qualifications in Facilities or
Project Management or related proven training, and at least 5
years experience at a managerial level. Experience in
Hospitality or Marketing will be an asset.
and you begin
tions for the
make changing the way you invest
your first priority.
"Active investing" means trying
to outperform benchmark indexes
(such as the Standard & Poor s 500
index) through market timing and
stock picking. You can capture the
returns of a benchmark index (less
the low cost of the index fund)
simply by purchasing an index fund
(which tracks that index).
It makes no sense to invest in
active management mutual funds,
unless there is a high degree of
probability that your returns will
exceed those of the index. The
reality is that there s a very low
probability of success.
The typical way to attempt to
beat the market is to identify stocks
that are mispriced, usually by rely-
ing on your own research, or the
recommendation of your broker
or financial pundits.
Passive investing, however,
which I prefer to call "evidence-
based investing," captures the returns
of the global markets by using index
funds with low management fees. Evi-
dence-based investors make no effort
to time the market or to select mispriced
Instead, they focus on their asset
allocation (the division of a portfolio
between stocks and bonds), keeping
costs and fees as low as possible, and
finally, tax efficiency.
In order to achieve success as an
active investor, you have to believe in
your ability to outguess the market.
You (or the fund manager in the actively
managed mutual fund you purchase)
will buy individual stocks you (or the
fund manager) believe will outperform.
You will sell stocks when you think
they are overvalued. An often over-
looked problem with buying and selling
stocks is that it s expensive. High trans-
action costs adversely impact your
A more fundamental problem with
active management is the low odds of
success. According to S&P Dow Jones
Indices data for the end of 2013, the
majority of active managers across all
domestic equity categories did not pro-
vide investors with returns higher than
their benchmarks over three or five-
year investment horizons. There is also
no reliable way to identify funds likely
to repeat stellar past performance.
Benefits of evidence-based investing.
Instead of trying to outguess the market,
evidence-based investors accept the
fact that the market (which consists of
millions of traders) does a very good
job of pricing stocks and bonds. Evi-
dence-based investors don t engage in
the low-probability game of trying to
outguess these collective traders.
By keeping costs low through the
use of low management fee index funds,
evidence-based investors increase the
odds of beating the returns of active
investors because of the difference in
Evidence-based investors don t try
to predict the direction of the markets,
or which mutual funds are likely to
repeat their outperformance. They
understand most actively managed
mutual funds are likely to underperform
their benchmarks and past performance
is not likely to persist.
Evidence-based investors heed this
admonition from Nobel laureate Merton
"Most people might just as well buy
a share of the whole market, which
pools all the information, than delude
themselves into thinking they know
something the market doesn t."
Investors are getting smarter. Accord-
ing to an August 6 Morningstar article
by John Rekenthaler, vice president of
research for Morningstar, net sales over
the 12 months ended June 30, 2014 for
all index-based funds (index funds,
exchange-traded funds and passive
mutual funds) accounted for 68 per
cent of net sales.
Clearly, for this period, investors con-
cluded the cost of active management
was so high, and the potential for incre-
mental returns so low, that it was not
a game worth playing.
According to University of Scranton
research, only 8.0 per cent of Americans
successfully keep their resolutions for
the new year. Many fail by the end of
January. If there s one resolution you
should make sure to implement, it s to
become an evidence-based investor. It
is the only intelligent and responsible
way to invest. You owe it to yourself
and to your loved ones.
Dan Solin is the director of investor
advocacy for the BAM ALLIANCE
and a wealth adviser with Bucking-
ham. He is a New York Times best-
selling author of the Smartest series
of books. His latest book is "The
Smartest Sales Book You'll Ever
The active or
debate is over
In order to achieve success as an active
investor, you have to believe in your
ability to outguess the market.
Links Archive December 13th 2014 December 15th 2014 Navigation Previous Page Next Page