Active investing refers to an investment strategy where the investor engages in trades with the goal of outperforming a given market. The market can be US stocks, international bonds, art, etc. To contrast, the purpose of passive investing is to match the market return. For example, to accurately match the return of the US stock… Continue reading On active investing and why markets need active investors.
Participants in financial markets are engaging in a zero-sum game. For any investor to generated excess returns over the market there must be someone that underperformed. Alpha works the same way, for every manager that has generated positive alpha, there must be someone that produced negative alpha. Yet, we are all aware of superstar managers… Continue reading Why active managers are having a hard time outperforming?