In reply to: Because they under-perform index funds? posted by NavyJoe
I'm not offering a perspective on how people should invest their money. I was simply offering an explanation as to why some scoff at actively managed mutual funds.
to truly understand and evaluate money management, IMO, one really needs to start with a basic understanding of alpha and beta relative to the benchmark(s).
basically, you might be below the S/P but taking on 50% of the risk and generating 200% of the expected return (as an example). That might be the better situation for the investor, depending on their risk profile, time horizon, etc.