This is the best thing you’ll read today, hands down…
My friend Wes Gray at Alpha Architect does a thought exercise about performance chasing and the vain attempts investors make to find the best stock-picking managers in the business. The findings of his research project are profound: Even if you had the ability to own only the stocks that would go on to be the best performing names in the market, you would still suffer periodic drawdowns as bad as the market itself.
Wes asks whether even God would have the ability to keep you as a client during these massive drawdown periods. The answer is probably not, because investors could never stomach the drawdowns associated with even the highest performing stock portfolio imaginable.
Stop whatever you’re doing and read this: