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Monthly Archives: June 2011

Predicting Future Returns

The objective of this study is twofold: One, even professional investors and investment advisors are not very good in predicting future returns and, perhaps contrary to their own beliefs, are unlikely to make good calls on asset allocation and/or timing decisions. Secondly, that these groups constantly underestimate the occurrence of “outlier” market returns, both positive and negative outcomes. These “outlier returns” are the most important determinants of overall market return over time, that is to say whether investors will only partially or fully share in market returns. In fact, it is the difference between ordinary and great returns! Read more

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