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Clayton Browne

Clayton Browne is an experienced writer, editor and translator with a broad background in the social sciences, technology, finance and investing. Favorite pastimes include science fiction, sports, poker and good food. He is an active volunteer at the Austin Children's Shelter and a member of the Austin-area Salvation Army Advisory Board.

  • LuisdeAgustin

    In a recent client paper, David Ranson, president of Wainwright Economics, discusses his
    firm’s research on the issue of passive investment. Passive investment styles
    have gained market share. Investors long ago knew that stock pickers have their
    good and bad times, although there’s no widespread agreement as to whether
    their aggregate success is random or systematic (but don’t ever breathe this
    notion to your erstwhile friendly stock-picker).

    Thankfully, Ranson finds that the success and failure of asset managers is not random. The
    question becomes, when do they have their best chance of out-performing the
    benchmarks?

    According to Dr. Ranson’s findings, active managers outperform the benchmarks about less
    than half the time; however, the timing is not random. It is systematically
    related to the financial and economic environment (he is so feeling, the way he
    puts that).

    Active management style performs best under the same predictive conditions that favor
    the stock market. Ranson adds that two indicators with predictive power are the
    price of gold and corporate spreads.

    History suggests that what have been the fall in gold and the narrowing of spreads bode favorably
    for active managers the coming year.
    Luis de Agustin

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