There is evidence that stock picking works in certain markets while not in others. Learn the relevant metrics and how paying attention to them could improve portfolio results.
Most investors end up with over-diversified portfolios that are costly and deliver poor performance. The typical asset allocation model and subsequent investment in a group of diversified funds often results in a portfolio of “Global Mush” with literally thousands of tiny positions.
Past performance may not be predictive of future performance but fund manager behavior, in terms of strategy consistency and conviction, is predictive. How do you measure that behavior to find active equity funds with high performance potential?
A strategy-based approach to creating a portfolio provides superior diversification relative to style boxes. Start by evaluating funds based on their self-declared strategy.