Comments by "Magic Beans" (@Magic_beans_) on "A Mistake To Avoid!" video.

  1. Exchange Traded Funds (ETFs) are just funds that can be bought and sold on an exchange like stocks. They’re different from mutual funds mostly because an ETF’s price constantly updates and they can be traded during the day. The price of a mutual funds only updates once a day after hours and they do their buys and sells at that time. Either type of fund can be actively managed (meaning a few specific people decide what to buy and sell) or passively managed (meaning the fund mimics an index).
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  2. That’s the point of this video, it’s not about Wood or ARK. Peter Lynch had a legendary run as the manager of the Fidelity Magellan Fund. He averaged 29% annual returns over his 13 years, double the S&P’s growth rate during that span. He only had two calendar years with negative returns, 1984 and 1987 (and you can hardly blame him for 1987). Even so, the median investor in the Magellan Fund during that period lost money. They didn’t just lag the market, they had negative returns in one of the most impressive actively-managed funds ever. How? Exactly what Patrick talks about, buying when the market is hottest and bailing when it cools off.
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