#OneMinuteInvestor: Simple arithmetic

January 16, 2019
The Evidence-Based Investor
YouTube video player
#OneMinuteInvestor: Simple arithmetic

About the Video

It isn’t a theory that passive investors receive bigger net returns than active investors. It’s a mathematical fact


There’s a simple piece of arithmetic investors need to understand.

It shouldn’t take a Nobel-Prize winning economist to point it out, but that’s what Professor William Sharpe did in a paper written in 1991.

Professor Sharpe invites us to imagine the global investing community divided into two — 

active investors on the one hand and passive investors on the other.

In aggregate, investors receive the market return.

We all have to pay to invest, but active investing costs more — usually considerably more — than passive.

And that makes a critical difference.

Before costs, the return on the average actively managed dollar, or pound or euro, will equa...

Summary & Key Takeaways

The summary of this video is not yet available 😢 We summarize videos one by one, so it might take a while. If you want to get the summary now, please summarize the video with our YouTube Summary extension.

Share This Video 📚

Summarize YouTube Videos and Get Video Transcripts with 1-Click

Download browser extensions on:

Find Summaries from The Evidence-Based Investor 📚