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Summary
- We will always have active and passive strategies in client portfolios. However, the percentage allocated to any investment type will vary over time.
- We believe we may have entered a transition period where the environment is becoming more favorable for active managers to outperform their passive counterparts.
- The most common, value-destroying behavior we witness on a regular basis is “recency bias.” This refers to the belief that whatever happened in the recent past will continue in the future.
- Investing in active managers is not simply a contrarian exercise and cannot can be determined solely by a review of charts.
- In summary, be mindful of cycles – they’re everywhere! Don’t chase performance, be patient, invest for the long-term, stick to the process and know your investments.