Author Topic: the thin green line  (Read 1845 times)

PeteD01

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the thin green line
« on: June 06, 2014, 10:21:05 AM »

arebelspy

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Re: the thin green line
« Reply #1 on: June 07, 2014, 01:50:02 AM »
Interesting that the definition of "The thin green line" they pose at the beginning:
Quote
The thin green line is the elusive line you must cross to get your fair share of stock market returns. What’s fair share, you ask?

Your fair share is the average returns provided by the stock market.

Is impossible to cross with Index funds. 

Don't get me wrong, I'm a fan of Index funds, and they'll outperform nearly any active investor.  But with index funds you're getting the average returns of what that index is tracking minus the cost of your fund.  So how could you cross the line to get that "fair share" of average returns, if by definition you're starting at that green line then subtracting fees?

Sort of a silly premise, IMO.

Better to define the thin green line as the average return after fees, and then index funds should outperform that line.
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PeteD01

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Re: the thin green line
« Reply #2 on: June 07, 2014, 02:14:54 PM »
I like your green line better.

It still amazing how easy things are for us today because of John Bogle and also how long it took for indexing to really take off.