Most of us use active fund managers to manage our long-term investments. But as we’ve already seen in the first three parts of this documentary, the performance of active managers is consistently poor. Furthermore, the effects of compounding mean that, over time, the charges they impose can have a very severe impact on the value of your investments.
In Part 4 we go in search of a better way to invest. First we explore the work of the French mathematician Louis Bachelier who famously concluded that “the expectation of the speculator is zero”. We then look at the Efficient Market Hypothesis developed by Professor Eugene Fama at the University of Chicago in the 1960s, for which the Professor Fama was awarded a Nobel Prize in 2013.