Covestor model managers’ monthly reports often describe little or no trading activity during the past period. This is to be expected for many models, especially those with long-term focus and value investing strategies. Portfolio activity is not always desirable, of course. With these models in particular we try to encourage managers to do a thorough monthly writeup, to make it clear that lack of recent trading activity in no way indicates a lack of constant monitoring and assessment of positions.
Reuters’ Felix Salmon did an interesting interview with financial advisor Josh Brown (The Reformed Broker), raising a similar issue of “action bias” on the part of advisors. The two also discuss the new Pimco Total Return ETF, which Brown thinks could be a game-changer for the active management field. The video is below – hit play to watch it:
More worthwhile commentary on the Pimco ETF over on Felix Salmon’s blog.
Note: Josh Brown is not affiliated with Covestor
Source:
“Felix TV: Action bias” Felix Salmon, Reuters.com, 7/20/11 http://blogs.reuters.com/felix-salmon/2011/07/20/felix-tv-action-bias/
