Games mutual fund managers keep playing year after year:
Window dressing, Painting the tape and Comparison shopping.
It is very interesting to note the following statistics:
Historically, 80% of all U.S. stock funds and 91% of small-company funds have beaten the market on the last trading day of the year -- and roughly two-thirds have given most of that gain right back on the first day of the following year.
A study by finance scholar Berk Sensoy shows that 31% of U.S. stock funds pick a benchmark that doesn't closely reflect what they own -- but does make it easier to beat "the market."
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