Financial Advisors are a Bunch of "Losers"
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Most financial advisors are advocating clients not to make wholesale changes to their portfolios despite the recent economic volatility, according to a survey by strategic advisory firm kasina.
More than 2,300 financial advisors across the country were asked about their top concerns and recommended courses of action. Despite fears about the European crisis, the study indicated that nearly half favored "staying the course" over significant reallocation in alternatives, equities, fixed income and cash.
Considering recent volatility, some wonder if financial advisors are falling behind the times. Others are not nearly as politically correct. As Jim Cramer puts it "buy and hold is for losers".
This is not a new debate. In the 1970s Burton Malkiel, a Princeton economist, published an influential book titled A Random Walk Down Wall Street. In the book he argued that markets were "efficient" and recommended a strategic, low cost diversified asset allocation. In other words, forget stock picking.
Malkiel's advice flies in the face of investment tactics used by Warren Buffet, hedge funds, and many other well known investors. Despite lackluster returns using buy-and-hold, and despite the mounting evidence in favor of tactical allocation and alternative strategies, buy and hold remains the favorite investment strategy used by many financial advisors, who on the whole, despite a few rare gems, are consider by traders to be a bunch of losers.
More than 2,300 financial advisors across the country were asked about their top concerns and recommended courses of action. Despite fears about the European crisis, the study indicated that nearly half favored "staying the course" over significant reallocation in alternatives, equities, fixed income and cash.
Considering recent volatility, some wonder if financial advisors are falling behind the times. Others are not nearly as politically correct. As Jim Cramer puts it "buy and hold is for losers".
This is not a new debate. In the 1970s Burton Malkiel, a Princeton economist, published an influential book titled A Random Walk Down Wall Street. In the book he argued that markets were "efficient" and recommended a strategic, low cost diversified asset allocation. In other words, forget stock picking.
Malkiel's advice flies in the face of investment tactics used by Warren Buffet, hedge funds, and many other well known investors. Despite lackluster returns using buy-and-hold, and despite the mounting evidence in favor of tactical allocation and alternative strategies, buy and hold remains the favorite investment strategy used by many financial advisors, who on the whole, despite a few rare gems, are consider by traders to be a bunch of losers.
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