tag:blogger.com,1999:blog-5465015914589377788.post4086987559925697031..comments2024-03-20T09:32:16.592-04:00Comments on Michael James on Money: Short Takes: Costly CPP Active Investing and moreMichael Jameshttp://www.blogger.com/profile/10362529610470788243noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-5465015914589377788.post-6972644353630844452020-11-04T09:39:31.176-05:002020-11-04T09:39:31.176-05:00The following exchange is reproduced to remove bro...The following exchange is reproduced to remove broken links:<br /><br />----- Richard July 4, 2014 at 11:21 AM<br /><br />That CPP article is a great illustration of the unbalanced risks of active management. From what I can tell, the CPP's "good outcome" is a net gain of about $10.5B of which $7.5B went to the managers and other costs. So in the good times most of the rewards go to the managers, but if things go wrong they have much less risk than the investor.<br /><br />It's a far cry from the rule in consulting that any service is an easy sell if the client will earn 10 times what they're paying for it. By that standard I believe active managers should be cheaper than index funds :)<br /><br />----- Michael James July 4, 2014 at 11:32 AM<br /><br />@Richard: Good points. Another aspect of this that concerns me is the trend toward shared-risk pensions. They makes sense on a certain level, but they also make it easier to bury bad active-management outcomes. "Unfortunately, we can't index your payments this year because market disappointed." There would be more unhappiness if people knew the real reason for reduced benefits is a combination of poor investment choices by managers and big fees paid to managers.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-83842875560398952272014-07-04T06:54:02.554-04:002014-07-04T06:54:02.554-04:00I thought I'd write less over the summer, but ...I thought I'd write less over the summer, but I guess a rested mind is an active financial writing mind? Who knows, gotta work on my backlog of "ideas" soon. Thanks for the inclusion, and enjoy the weekend.Big Cajun Manhttp://www.canajunfinances.comnoreply@blogger.com