Why Indexing Is So Hard
The most counter-intuitive part of indexing is the avoidance of action, especially in an effort to beat the market. We generally associate hard work and hours of effort with success, however in investing it turns out to be exactly the opposite. All those costs incurred by action (commissions, bid-ask spreads, and realized capital gains) make beating the market that much harder.
This “action bias” to do something has recently been documented in the decision making of goalkeepers during penalty kicks. Although data shows that they could be more successful by staying in the middle (no action), they still jump to either side (action) over 90% of the time.
Welcome
Welcome to Mariposa Capital Management, LLC’s blog. Mariposa is an independent, fee-only investment advisor providing objective investment advice and portfolio management services, expecting to open in early 2010. Until then, we are looking for “beta” clients as we start the business. If this sounds interesting to you, please email us at info@mariposcap.com.
About Me
I developed an interest in personal investing through giving financial advice to friends and family while working on Wall Street. After seeing first-hand how so many personal investment strategies were based on misinformation and conflicted advice, it became my goal to create an investment advisory firm without the conflicts of interest that are ever-present in the industry. Thus, the birth of Mariposa Capital Management as a trustworthy, independent advisor.
Prior to the founding of Mariposa Capital Management, I spent several years as a portfolio manager with Merrill Lynch in New York.
Newer »
