Barry Ritholtz over at my favorite blog The Big Picture picked up on an interesting study by NYU:
[F]und managers who invest based on macroeconomic trends — and are willing to adjust their portfolios as those trends change — are the managers most likely to add value for investors.
As Barry notes, defining “macro trends” and other key terms is a bit ambiguous at best. Regardless, Barry adds some facts which have many declaring Jeremy Siegel’s Buy & Hold philosophy as dead as Nietzsche’s god:
Cash has beaten stocks for the past 10 years; Even worse, Bonds have beaten Stocks since 1966. To me, this suggests that an active asset allocation program (rather than pure market timing) is the way to go for most high net worth investors.
As a wise man once said, “Oy!” One thing is for sure: you can bet Siegel will have a new book out with new charts explaining how his legacy still holds water. Unfortunately, real 401(k)s prove otherwise.
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