The One Number That Changed How I Think About Investment Risk
- Fabio Capela
- Risk management , Sharpe ratio , Risk adjusted returns , Portfolio analysis , Investment metrics , Systematic investing , Performance measurement , Quantitative finance
For years, I focused on the wrong metric when evaluating my investment performance. Like most investors, I obsessed over returns. How much did I make this month? How much did I make this year? How did my portfolio compare to the S&P 500?
Read MoreThe Truth About Beating the S&P 500: What 8 Years of Real Trading Taught Me
- Fabio Capela
- Market outperformance , Systematic investing , S& p 500 analysis , Investment performance , Portfolio management , Risk management , Quantitative finance , Active investing
I’ve heard this phrase countless times from financial advisors, academic researchers, and fellow investors. The conventional wisdom is clear: 90% of professional fund managers fail to outperform the S&P 500 over ten years, so why should individual investors even try?
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