nottheaverageactuary

Actuarial news and views from Cape Town and beyond

On Investment Strategy

Leave a comment

Quite an entertaining article at the link:

http://www.washingtonpost.com/business/get-there/the-philosophies-of-alpha-and-beta/2015/08/14/0706f2f8-41f2-11e5-846d-02792f854297_story.html

The author develops a hypothetical TV interview to distinguish between active and passive investment strategies. The author concludes with some words of caution, that investors should be aware of the risks and low odds of success for active investors, and one should also maintain a substantial amount to be invested passively over the long term.

How does one choose the split though? Perhaps one has an affinity for active investing and finds the analysis required for passive investing boring. I find this aspect as important as other factors which should determine the most suitable investment strategy and assets to invest in. Other factors could include the age and lifestyle of the investor, as well as their current or future commitments. I guess it could be argued that investment should only be subjective to the point of providing for the particular investor’s set of financial needs, detached from everything else that isn’t deemed a necessity to consider, a mechanical, purpose-driven framework to base one’s investment decisions. Where’s the fun in that?

On a brighter note, in an attempt to make passive investing seem less dull, I found an article which highlights a few considerations when changing investment strategies which could be applied to an active investment strategy as well.

https://www.wellsfargo.com/financial-education/investing/selling-stocks/

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s