Reality Check
12 questions
How many euro-denominated world equity funds fell short of their index over ten years?
98 percent, per SPIVA Europe mid-year 2025.
Why does a single good year tell you little?
Because short-term rates sit near half, and the picture only becomes clear over long periods.
What is survivorship bias in this statistic?
Closed or merged funds drop out of the comparison, which makes the active side look better than it was.
Where does the 74 to 89 percent range come from?
From national regulators' analyses, summarized by the European securities regulator ESMA.
What measures followed from it?
Leverage caps, a margin-close-out rule, negative-balance protection, incentive restrictions, and mandatory disclosure of the loss rate.
Why is the rate more of a floor?
Because it only covers twelve months. Over longer periods, the share of accounts with losses rises.
How often do ten-percent declines occur?
In broad stock markets, roughly once a year on long-run average.
Why do different recovery times circulate for the period after 1929?
Because they depend on whether dividends and inflation are included. Both figures are correct.
What should the investment horizon be based on?
The unfavorable case, not the average, so no forced sale becomes necessary.
What do the Taiwan day-trader figures rest on, and why are they especially reliable?
On the complete transaction data of the entire exchange over 15 years, not surveys. That rules out selection and memory biases that affect self-reported data.
How large was the average daily loss for day traders after costs?
About 24 basis points, meaning just under a quarter percent of deployed capital per day.
How many of the newly started day traders were still active after three years?
About 15 percent.