You would think active managers would outperform in bear markets. They tout their ability to predict the direction of the market.
If they had this skill, they would “flee to safety” before the market tanked.
It’s a myth. Here’s what Standard & Poors concluded:
The belief that bear markets favor active management is a myth. Buying index funds won’t prevent you from losing money in a bear market.
But relying on active mutual fund managers to protect you from bear markets is likely to increase your losses.
Listen to the sage advice of Warren Buffett: By periodically investing in an index fund, for example, the know-nothing investor can actually outperform most investment professionals.
Don’t believe the myths of active management.