Are your portfolio returns down to skill or luck? Have you outperformed due to stock picking skill or just good luck, aided by the wider market rally? Conversely, has your portfolio underperformed due to a run of bad luck or poor decisions? It's hard to tell.
Those that outperform are more likely to say that it was their skill that yielded results. While those investors that have lagged the market are most likely to blame a run of bad luck.
Michael Mauboussin, the head of Global Financial Strategies at Credit Suisse, looked at the key distinctions between skill and luck in his book The Success Equation: Untangling Skill and Luck in Business, Sports and Investing.
Skill vs. luck
Even though The...
Login required to continue reading.
Setup a free account to get access to this article (no credit card required).
View Full Article
