Viewing entries tagged
Investment Management
Passive funds have become the cornerstone of modern investment portfolios, praised for their low costs and market-wide exposure. But is there more to the story than meets the eye? Could it be that these funds, while seemingly beneficial, are facilitating practices that ultimately disadvantage the very investors they aim to serve?
In the world of investment management, there's a widespread problem of mediocre results. This isn't because passive investment strategies are brilliant, but rather because the academic understanding of a statistical concept called "mean reversion" has been distorted. Some psychologists and economists have won Nobel prizes by misusing the concept in their theories, which has led to a mistaken belief that active investment managers are generally incompetent.
