Fool analyst Austin Smith reviews the fiscal year 2012. The S&P 500 was up 16% and hit a five-year high. The Dow was up 7.3%. Most money managers didn't do as well: 65% of large-cap managers underperformed the S&P 500 as did 80% of large-value investors; 67% of small-cap managers didn't beat the Russell 2000 index.

Why was this? Management fees charged by professionals will reduce investor returns. More importantly, money managers may have reacted emotionally to all the bad economic news during the year (Greece, China, the fiscal cliff) and sold stocks prematurely.

What to do? Either buy an index fund or go the Fool route. That is, buy great companies for the long haul. For all the volatility of the markets, Apple was up 31% for the year, Wells Fargo 23.4%, Amazon.com 40%, and 3D Systems 247%. Austin believes buying and holding great companies like these will deliver superior results compared to professional money managers.


There's no doubt that Apple is at the center of technology's largest revolution ever, and that longtime shareholders have been handsomely rewarded with over 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple and what opportunities are left for the company (and more importantly, your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

The article Attention, Investors: Your Manager Lost You Money, Again originally appeared on Fool.com.

Austin Smith owns shares of Apple. The Motley Fool recommends 3D Systems and Apple. The Motley Fool owns shares of 3D Systems and Apple and has the following options: Short Jan 2014 $55 Calls on 3D Systems and Short Jan 2014 $30 Puts on 3D Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


Increase your money and finance knowledge from home

What is Short Selling?

Make a profit when stocks prices fall.

View Course »

Introduction to ETFs

The basics of Exchange Traded Funds and why ETFs are hot.

View Course »

Add a Comment

*0 / 3000 Character Maximum