The one big advantage you have over fund managers

Many investors trust their money to fund managers in an effort to 'beat the market'. But this is often a mistake. John Stepek explains why you could be much better off without them.

As a group, fund managers do a poor job. It's not just a problem in the UK. Last year, nearly 80% of large-cap fund managers in the US underperformed the S&P 500 index, according to Morningstar.

Given that the US index only returned 2% last year, that's not very encouraging. That standard of stock-picking isn't going to leave you with a healthy retirement pot.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.