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Talking Real Money - Investing Talk

Active Management Myth

Talking Real Money - Investing Talk

Don McDonald

Education, Business, Investing, How To

4.5811 Ratings

🗓️ 11 May 2026

⏱️ 34 minutes

🧾️ Download transcript

Summary

Tom and Don take aim at the persistent myth that active management adds meaningful long-term value, using a new study highlighted by Larry Swedroe showing that 1,260 balanced mutual funds dramatically underperformed simple low-cost index portfolios from 1990–2021. The duo contrasts expensive actively managed balanced funds with inexpensive index strategies like the Vanguard Balanced Index approach, illustrating how fees alone can devastate long-term returns. Along the way, they discuss the em...

Transcript

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0:00.0

Your guides to a really great financial future.

0:09.0

Tom and Don are talking real money.

0:12.2

There's no point in you trying to do this stuff yourself.

0:16.9

You don't know anything about managing money.

0:19.4

You're just a bunch of people listening to a podcast.

0:23.1

No, ladies and gentlemen, let me tell you, if you want to do this right, you need a professional.

0:29.1

It's un-American to index.

0:31.4

It is wrong.

0:32.5

It is basically anti-capitalist, anti-American.

0:37.5

It is a terrible thing.

0:39.1

Active management only makes sense.

0:41.9

It's going to make you more money in the long run.

0:44.6

Or is it?

0:46.0

Hmm.

0:47.3

Hi, everybody.

0:48.8

It's talking real money time.

0:50.4

I'm Don.

0:51.4

Over there is Tom.

0:52.4

And we are going after that longstanding myth that we thought was put to bed a long time ago, that active management actually adds some sort of value to your portfolio.

1:08.0

Yeah, it's still a belief. I mean, because it's still something like half of the

1:13.7

money in mutual funds and exchange traded funds is managed with traditional active management.

1:20.9

I mean, it just, it's still out there. And the fact that we have to throw in traditional

...

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