1. Low cost passively managed funds are the initial benchmark against which investors of all kind need to measure their achievements. With the advent of ETFs, the available universe of passively managed funds has expanded dramatically.
2. There are a few exceptional fund managers whose talents are worth paying for (if you can find them - and I look a lot). The other 95% are not: invariably you can achieve the same results at a lower cost.
3. However good, no professional can ever outperform in all years and all market conditions - strategic market timing and asset switching calls are ultimately the investor's own specific responsibility.
4. It is better to make a few good decisions each year than a lot of bad ones, as turnover kills performance. It also absorbs too much of the investor's precious time.
5. You need to keep yourself well-informed and (even better) well-read in financial history and behaviourial theory to have a chance of outperforming the market. But paradoxically that does not mean that you need to know a lot about everything to succeed: knowing what is important and binning the rest is the key.
6. While market timing is widely believed to be an unprofitable investment approach, in practice the smartest investors always seem to have a view of some kind about where the markets are heading. In my experience you cannot totally divorce a topdown and a bottom up approach.
