How Dave’s Dad Beats Professional Money Managers

Dave’s dad knows nothing about investing, yet he still beats the pros. His secret? Ignoring the noise and sticking to index funds.

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When you hold an index fund, uh, and once you embrace the strategy, you just get out of this mindset that my goal as an investor is to get in at the right time and get out at the right time and to find the right company on its way up and then to get out of it on the way down. So, once you get those behavioural problems aside, uh, and you focus just on the long term, that has a lot of advantages as well.

Oh, I mean, I I’ve mentioned many times, my father’s the, you know, great at that. He, you know, in part of his portfolio as these index funds, he never looks at them. So he never gets emotionally engaged and gets panicked at the wrong time. He’s outperformed all the professional money managers over extended streaks. And he knows nothing. The guy knows nothing about investing, pays zero attention, and he puts up the best performance numbers of anybody I see. And I’ve often said to people, if you and I take on Michael Jordan, in basketball and one on one, we’re not beating them, but my dad is truly beating the professional money managers.

It’s just absolutely astounding and trying to drive that home to people that that’s possible is difficult, but more and more people are clicking to it. And as you mentioned, index funds aren’t perfect. They don’t protect you on the downside, etc. Markets are very expensive right now. For example, we could have pullbacks in the next little while. But in the long term, the odds favour that they’re going to give you a better performance number than a professionally managed fund. It’s that simple.