When to recommend active management?

From the FT:

Under what circumstances would you advise somebody to use active money managers as opposed to index funds?

SA: I can think of many cases in which I would recommend active money managers over index funds. For example, I might be giving the advice to someone I hate, or—and this happens a lot—someone I expect to hate later. I would also recommend active money managers if I were accepting bribes to do so, if I were an active money manager myself, or if it were April Fools’ Day. And let’s also consider the possibility that I might be drunk, stupid or forced to say things at gunpoint. I’ve also heard good things about a German emotion called schadenfreude, so that could be a factor too.

Scott Adams is the creator of the Dilbert comic strip that appears in thousands of newspapers world-wide and www.dilbert.com.

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