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Why passive money management historically giving good results than active money management style.?

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Question added by Muhammad Shahzad Majeed , Relationship Manager /Analyst , Century Financial Brokers LLC
Date Posted: 2016/11/08
Duncan Robertson
by Duncan Robertson , Strategy Consultant , Duncan Robertson Consultancy

It's partly because of transaction costs.  Switching assets always costs money which would otherwise remain in the investment.  In other words, switching converts a little bit of your asset into nothing. 

 

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