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Chart of the Day: Sell Your Winners AND Your Losers

Crews Bank & Trust Wealth Management Services Jun 29, 2023
bar chart representing different fund sizes and random

Contents

Today’s Chart of the Day comes from Craig Lazzara's article “Persistently Disappointing.” It asks if top fund managers outperform due to skill or good luck. In EVERY fund category and over EVERY time frame, it was found to simply be good luck. To make this fact even more disturbing, top managers had an even worse chance of repeating their success going forward.

This can be attributed to the “mean reversion" theory, but that is another discussion for another day.

In summary, “In the end, you are better off not even playing the game [of trying to pick top managers]," so "sell your winners and your losers, and simply invest in the index.”
Chart of the Day

About the Author

Crews Bank & Trust Wealth Management Services
Crews Bank & Trust Wealth Management Services

Experienced professionals from our wealth management services team can help you achieve a bright financial future through investment strategies tailored to you. We’ll show you all of the options available and help you choose the ones best suited to you. We’ll provide high-quality, personal service as we work toward your goals together. Our Portfolio Managers do not receive commissions on trades; our recommendations of investments are based solely on your best interests.

Investments are not a deposit or other obligation of, or guaranteed by, the bank, are not FDIC insured, not insured by any federal government agency, and are subject to investment risks, including possible loss of principal.

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