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Rekenthaler Report

Me Active, You Index

Finance experts don't necessarily invest as they advise.


Do as I Say
Richard Thaler, the 2015 president of the American Economic Association, agrees with Nobel laureate Eugene Fama that retail investors are best off owning index funds. Warren Buffett gives similar advice, as does David Swensen, Yale's chief investment officer. Harvard professor Andre Perold serves as a director for the bastion of indexing, Vanguard.

Yet, while advocating indexing, four of those five are unquestionably active investment managers. Thaler is a principal of Fuller & Thaler Asset Management, which runs institutional monies in addition to subadvising on a mutual fund. Buffett, of course, runs  Berkshire Hathaway's (BRK.B) stock portfolio. For their part, Swensen and Perold both allocate their assets actively (Swensen for Yale's endowment fund, Perold for his advisory firm's clients), frequently by using actively managed funds.

John Rekenthaler has a position in the following securities mentioned above: BRK.B. Find out about Morningstar’s editorial policies.

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