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Forward Guidance cover image

The Laws Of Quantitative Investing | Michael Robbins

Forward Guidance

NOTE

Investing Actively vs. Passively: A Closer Look

Investing passively, focusing on being efficient and diversified, is a great strategy. It's important to not spend excessive time analyzing stock statistics and instead focus on easier ways to achieve returns. While institutional investors may need to consider tail risk funds, for individuals with a long-term perspective, investing in the S&P 500 or a diversified global equity market is the best approach. However, when it comes to individual stocks, the outcome is less assured and gambling theory and Kelly sizing should be considered. While the past performance of the S&P 500 is no guarantee of future success, individual stocks carry even greater uncertainty.

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