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 the rates are close to half in the short run and a clear picture only emerges over long periods.
What is survivorship bias in this statistic?
Closed or merged funds drop out of the comparison, so active funds look better than they were.
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, an obligation to close when collateral runs short, negative balance protection, limits on incentives and the mandatory loss rate statement.
Why is the rate more of a floor?
Because it only looks at 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 term 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 right.
What should the investment horizon be based on?
On the bad case and not the average, so you're never forced to sell.
What do the Taiwan day-trader figures rest on, and why are they especially reliable?
On the complete trading data of an entire exchange over 15 years, not on surveys. That removes the distortions that arise when people report their own results.
How large was the average daily loss for day traders after costs?
About 0.24 percent of the money put in per day.
How many of the newly started day traders were still active after three years?
About 15 percent.