FYI: Here, from my archives, is a piece I wrote about how portfolio managers were being shackled by “the style police,” investment consultants and financial planners who demanded that they invest with rigid adherence to predetermined allocations. Of course, you could buy that sort of mechanical obedience with an index fund at a fraction of the price, so “style purity” made no sense to me. Why pay a human not to use his or her judgment when you could have a machine invest mindlessly for next to nothing? If you want to use an active manager, you must encourage him or her to be more active, not less. That doesn’t mean trading more often; it means thinking more independently.
Regards,
Ted
http://jasonzweig.com/the-tyranny-of-style/
