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Empirical studies have shown that unglamorous buy and hold strategies (beta) tend to outperform active strategies (beta +/- alpha – costs) over the long term. And there is a last simple argument against alpha pursuit: Because of the zero sum nature of alpha, one must necessarily be better at alpha generation than at least half the capital chasing alpha in the market. And given the size of global capital markets, that is a lot of competition.

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Submitted May 30, 2017 at 10:56PM by gogloxin http://ift.tt/2qy96KC

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