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On the rational front, I’ve often defended my change in view from my 1960 FAJ article with this idea: In 1960, we compared a bad index (DJIA) with a good industry—see (a) to (d) above. In 1974, I compared a good index (S&P) with a bad industry
In the future, somebody will write:
In 20XX, we compared good industry against a bad benchmark. It wasn't widely recognized then that not all mutual funds need to exist to beat the corresponding index but some were structured to alleviate the full market risks indices face at the cost of performance relative to the index. The long bull markets minimized this rationale by proscribing a long enough investment window to assume market risks (as opposed to market volatility) to be zero. But that period ended in ...
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In 20XX, we compared good industry against a bad benchmark. It wasn't widely recognized then that not all mutual funds need to exist to beat the corresponding index but some were structured to alleviate the full market risks indices face at the cost of performance relative to the index. The long bull markets minimized this rationale by proscribing a long enough investment window to assume market risks (as opposed to market volatility) to be zero. But that period ended in ...