What Fund Managers Get Wrong

Fund managers think long and carefully about what new investments they purchase. But do they take the same consideration about what stocks they sell?

John Rekenthaler 23 January, 2019 | 7:23AM

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Last week my column looked at research showing that managers are more adept at buying stocks than selling them, with new purchases outperforming existing holdings over the ensuing 12 months.

In the paper, “Selling Fast and Buying Slow”, the researchers found that sales that occurred on days without earnings announcements fizzled. In effect, the stocks that the managers rejected would have been among their stronger performers.

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About Author

John Rekenthaler

John Rekenthaler  John Rekenthaler is vice president of research for Morningstar.

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