Why the "Best" Investors Still Fail

The luster of investing with ever-exclusive hedge funds may not be warranted.

Data compiled from Morgan Housel suggests that over the long run, these vehicles significantly underperform passive indexes. While the hedge fund universe has no shortage of known rockstars like David Einhorn, there are many more subpar managers who benefit from the outperformance of a few while actually trailing passive indexes by a wide margin.

There are many reasons this happens, but perhaps the most significant is the drag from fees, which is why we advocate taking the reins of your own investing future and buying and holding great companies for the long run.

If you're looking for some of these proven long-term investing ideas, let me invite you to read the Fool's brand-new special report: "The 3 Dow Stocks Dividend Investors Need." It's absolutely free, so just click here and get your copy today.


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  • Report this Comment On November 15, 2012, at 4:15 PM, Darwood11 wrote:

    Well, it's all about the definition of the word "best."

    Even the best can't predict the direction of management. Netflix, anyone???

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