Sunday, November 26, 2006

why fund managers don't beat the market

Have you ever wondered why the majority of active fund managers fall short of the market? After all, these professionals didn't get to be professionals by being bad investors.

A study done by finance professors Gordon J. Alexander, Gjergji Cici, and Scott Gibson sheds some light on the subject. The study shows that one reason active fund managers have trouble beating the market is their funds' liquidity policies.

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