Re: Evaluating Managed Funds
[ QUOTE ]
I'll interject something here, evaluating the risk to acheive the expected albeit uncertain returns must be evaluated as well. Sounds like a trite statement but I assure you it is not. For example if I take the "equivalent" risk of leveraging SPY by 2-1 in my portfolio but only "expect" investment returns 1.5x what I would expect with SPY by investing in my portfolio, I've taken on more risk than I need to. Hope I explained what I'm driving at. Anyway in evaluating any money managers record IMO one has to evaluate the risk that was undertaken to achieve the returns.
[/ QUOTE ]
Exactly. This is a complex decision (efficient frontier stuff, etc) for which he is not going to be able to make a profitable decision without the requisite background in finance (unless he gets lucky). He might consider lottery tickets instead, which are going for a buck a pop.
|