Just as financial markets seem to price in ever lower global growth expectations, we are entering the seasonally less liquid and more volatile month of August with the prospect of 0% global equity returns over the next 12 month... This is bad news for both index trackers (who cannot choose) and for mutual funds (whose mandate is typically to remain fully invested at all time and whose large size typically prevent them from being truly active anyway).
But investors who manage their own portfolio of individual holdings have full flexibility, including that of using butterwire's Stock Explorer function to look for investment candidates with the potential to fare better than most should financial markets jitters escalate.
As the FT recently reported, quant funds haven't had a good start of the year. Indeed, the backdrop for stock-picking has been steadily deteriorating these past 6 months.
In contrast to quant funds, the global stocks suggested by butterwire continued to deliver value to its users.
The Italian stock market rout illustrates the real value of active investing
One of the main advantages of active investing, which consists of carefully selecting a small number of securities for your equity portfolio, is that you only need to be lucky with what you can know something about, notably the companies whose shares you decide to buy.
The good times of mindless passive investing are over. Time to get truly active.
Simple, passive investing is both intellectually convenient and a successful strategy over the past few years. But does this make it a fundamentally sound long-term one, would you buy a broken clock just because you happen to look at it on exactly one of the two times in the day when it happens to be right?
Active cyborg investors have edge on the passive robos.
Unlike its Artificial Intelligence sibling, Augmented Intelligence supports rather than threatens (human) investment advisors and managers.