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Stock pickers are seeing record inflows, but still won't outperform the market, says investing legend Charley Ellis

1. 73% of active managers underperform benchmarks after one year. 2. 95.5% miss the mark in five years, with none succeeding after fifteen years. 3. Growth of passive funds raises concerns about the future of active management. 4. The ETF space grows amid a focus on low fees but poses investor risks. 5. Technological equality makes finding an edge in active management increasingly difficult.

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FAQ

Why Bearish?

High underperformance rates of active managers suggest a trend toward passive investments, potentially weakening S&P 500 performance, as noticed during previous market shifts favoring indexing over stock picking.

How important is it?

The trends discussed could significantly reshape investment strategies affecting major indices, thus influencing overall market health.

Why Long Term?

Persistent underperformance signals a long-term shift in investor strategy, as seen in market reactions to passive fund growth over the past decade.

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