The Rubber Meets the Road

Connelly, Thomas J.
December 1998
Journal of Financial Planning;Dec1998, Vol. 11 Issue 6, p28
Academic Journal
This article focuses on the issue concerning the failure of some investment managers to effectively manage the assets and money of their clients. By virtue of being human beings, all people will make mistakes eventually and one must be prepared to deal with them. As investment managers and financial planners, their mistakes can have a material impact on one or more individuals, possibly compounding the need for effective coping mechanisms. After all, managing other people's money is one of the most stressful occupations around, and most financial planning practices have become investment management shops. On the other hand, Russell Fogler talks about the time interval needed to distinguish investment skill from chance for portfolio managers. This information is invaluable as a mental ruler for keeping historical performance for money managers in perspective. It is also useful to remind investment managers that often the fruits of their own investment advice may be due to chance rather than skill, and perhaps they should not become too personally enamored of the results of their work.


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