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[quote=Anonymous][quote=Anonymous][quote=OTAlexFA][quote=Anonymous][quote=OTAlexFA]The market environment suggests it is currently a stock picker's market.  So, active management for that hypothetical client is where I would lean.[/quote]
This is 12:57, 14:05 and 14:33 again.

Why specifically does this environment suggest it's a "stock picker's market"?

I find that during big bull periods when almost everything goes up, people make this assumption that there was not a lot of variance within different segments of the market, or between individual stocks, when this isn't actually true.  It's just that because everything went up, people don't notice the variances as much, as 30% versus 50% between two stocks doesn't trigger any emotional reaction.

By contrast, when a market is likely to churn sideways, these same variances will actually involve red versus green on a screen (i.e., you now see a -10% versus 10% between these same two stocks), so it's more noticeable to people.  Hence, all the active managers pipe in with the "stock picker's market" cliche, as if every market isn't a stock picker's market.

Put another way, what statistical or empirical evidence can you point to that "alpha" can be generated in a market like this more than in a different environment? [/quote]

The returns this year argues that it hasn't been.  It doesn't mean that the environment wasn't in place, or so people would lead you to believe.  Record highs, perceived "overvaluation", calls to end the bull market which I didn't feel were accurate, etc.  Is there economic data to support the upward climb?  No.  But, is there anything suggesting it won't continue?  No.  I'm just personally in the camp of, within the next 3-5 years, history suggests a swing.  But, no, you're right...there's no data to suggest it, except for historical charts.[/quote]

And you can pick the stocks that will do well in the next bear market, and you are just hanging out on DCUM because you are bored waiting for the correction?  Got it.[/quote]

I'm not sure I said that either, as I'm not a fund manager.  I don't think people have an understanding of what financial advisors do.  Maybe I should have started there but I'm not sure how many times or ways I can say it so let me just say this...

If you're #1 and only concern is returns, I am not your guy.  And, I think it is fair to say, to achieve that, you might very well be taking on more risk than you should.  But again, it varies based upon each individual investor's risk tolerance.  I'm no day trader.  I'm no daily player.  I develop a long-term strategy that includes retirement, multi-generational planning, estate, charitable, et al.  Yes, returns are a part of that overall plan.  But, my main concern is reaching clients' goals and objectives.  If your main goal is, "Get me the highest return possible," you'd be better served elsewhere, because I'm also going to take into account what is in your best interests and that risk probably isn't it.

I hope that makes sense because I can't spell it out any further.[/quote]

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