Asset Allocators Fail, Advisors Should Pick Stocks, Save Investors $34 Billion Annually
Image: The area of large cap growth has trounced that of the 60/40 stock/bond portfolio for more than a decade. Image Source: Morningstar. By Brian Nelson, CFA We’ve all heard the stories. Professional stock pickers can’t beat a bunch of monkeys throwing darts at the pages of the WSJ. A cows’ investment decisions are just as good as the pros’. Stock prices reflect all available information so not even professionals have an edge (e.g. the efficient markets hypothesis). Most professionals can’t outperform their respective benchmarks, so how could mom and pop? Look at this from one of today’s bloggers: The traditional argument, which you’ve probably heard many times before, goes as follows: since most people (even the professionals) can’t … Read more