Bob Brinker: Market Savant & Radio Host Message Board

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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host

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To: Joe Basile who wrote (4063)	3/12/1998 5:44:00 PM
From: sea_biscuit	Read Replies (1) of 42834

I've heard Bob say that the idea of managed funds outperforming the indexes in a bear is a fallacy (sp?). After all, (I think) a fund manager's job is to be in stocks regardless of the overall market outlook. The following strategies would have required you to stay fully invested in a bear market, i.e. 1973-81, AND they also outperformed the indexes (all percentages are annualized) : Dow Dogs : 14.04% Cornerstone Value (used by OSCVX) : 14.21% Cornerstone Growth (used by OSCGX): 14.43% 50% Dow Dogs, 50% S&P (used by Payden & Rygel G & I) : 9.78% During the same period, the Dow returned 5.98% and the S&P 500 returned 5.16%. CDs averaged 9.62% from 1975-81 (I don't have the 1973 and 1974 numbers for CDs, but most probably they were around 6% to 7%). Granted that these are not "managed" funds in the true sense, and can be called "strategy index funds", but the point is -- any manager implementing them would have stayed fully invested in stocks and outperformed the indexes (and quite possibly any other form of investment). Dipy.

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