Is Warren Buffett Right.....Is Active Money Management Worthless?

Thus far, Warren Buffett is beating the pants off his rival in now infamous 10 year performance wager. Warren Buffett adds to his lead in $1 million hedge-fund bet

The wager is simple. According to Mr. Buffett, the S&P Index will beat a hand selected portfolio of hedge fund and fund of fund managers. The creme de la creme if you will. And the results thus far?

The S&P is up 63% Vs. Hedge Funds +20%.

This brings out an important question. Is active money management even worth your time?

My opinion remains the same. If you NOT an active investor, pick the least expensive index ETF and keep putting money into it month after month. Long-term, you will come out way ahead of 99.5% of money managers out there.

Otherwise, active money management does make sense. There are thousands of different ways to consistently outperform the market. Sometimes by a large margin. For as long as active investors dedicate their time and continue to improve their skill set, it is the only logical outcome. Someone will outperform this market and get rich, it might as well be you.

At the end of the day Warren Buffett himself is a perfect illustration on that.