In discussions of finance and investment, it is routine to see disclaimers such as “may lose value,” and “past performance is no indication of future results.”
However, as we have pointed out in our paper Financial charlatanism: The effects of backtest overfitting on out-of-sample performance, even this may be a bit optimistic, as certain investment strategies, marketed to the public as money-winning, actually might be pretty much guaranteed to be money-losing, particularly when fees and other expenses are considered.
These considerations raise the question: Are individual investors equipped to make the sorts of financial decisions that increasingly are required of
Continue reading Are individual investors equipped to make basic financial decisions?