Salient to Investors:

Nobel Laureate Harry Markowitz said:

  • Booms and busts happen and every time is different in terms of the fundamental causes. 2008 didn’t change the historical probability distribution of returns.
  • 2008 was not an outlier event but a one-in-40 event and was not the worst year of return.
  • Investors should make forward-looking estimates but attach a very large variance to them, and discount any expected return estimates the sell side gives you.

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