We have changed our privacy policy. In addition, we use cookies on our website for various purposes. By continuing on our website, you consent to our use of cookies. You can learn about our practices by reading our privacy policy.
© 2016 Shmoop University, Inc. All rights reserved.


People like money. You make money for the people. People get happy. See how that works? You should be feeling some warm fuzzies right about now. But really there ain't none for most mutual fund managers. You can spend a lifetime pushing money around and it’s 99.9% likely that your results are not much better and probably much worse than if clients had just put their money in an index fund or ETF (i.e. unmanaged-by-humans mutual fund that doesn't really trade—like the S&P 500 has an ETF, ticker: SPY which is just the S&P 500 stocks). So you spent your whole life doing all this research…for what?

The glory comes in discrete moments. You were the largest shareholder of a company where you have a cost basis of 8 bucks a share and Amazon just bought it for 20 bucks a share. You made a killing on that investment. You take victory laps around the office, trading room floor and get some "attaboys" from shareholders and/or The Board. But that was one stock. Over time, you regress to the mean or worse (with taxes and fees) so...you make your own glory when you can get it.