1887

n MoneyMarketing - Luck vs skill – in sport and investing - investing

Volume 2020 Number 4
  • ISSN : 2617-6777

Abstract

One of the greatest difficulties when choosing an asset manager to look after your hard-earned cash is determining whether their performance is due to luck or skill. Over short periods of time, this distinction is nearly impossible to tease apart. If a group of people with no investment experience were to create a portfolio of stocks at random, some of the portfolios would outperform the market while others would underperform. Clearly the outperformers did not beat the market using skill. And yet, due to human nature, the outperformers would confidently state that they were talented, while the underperformers would grumble about their misfortune.

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/content/journal/10520/EJC-1cb865c644
2020-04-30
2020-11-24

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