Practical Applications of Evaluating Trading Strategies

Abstract

Warning!

You are likely relying on false research to inform your investment choices, according to an article in The Journal of Portfolio Management’s 40th Anniversary Issue .

Investors often rely on financial research when developing investment strategies, but this could be a huge mistake, warn Campbell Harvey and Yan Liu. In their article, Evaluating Trading Strategies , Harvey and Liu tell researchers they are finding seemingly successful trading strategies by chance. They tell investors they need to be a lot more skeptical of investment proposals. The article was awarded Best Article in The 16th Annual Bernstein Fabozzi/Jacobs Levy Awards.

In a video interview, available online at http://bit.ly/1DgcZ2X, Cam refers to proposed guidelines for researchers and Wall Street’s surprising reaction to them. This report comprises excerpts from the video, which is intended to jump start the conversation. For a deeper understanding, read their article in The Journal of Portfolio Management’s 40th Anniversary Issue .