In the Margins

How useful are traditional fund ratings?

February 9, 2016

By The Wall Street Journal

Most traditional fund ratings guides don’t take into account who is investing. "They assume every investor feels the same way about losing money when, in fact, behavioral economists in recent years have discovered a surprising amount of variation in how people feel about losses," Shlomo Benartzi and John Payne write in a Journal Report. "As a result, fund-grading systems have the potential to provide misleading guidance to those whose loss tolerance falls outside the norm—which some recent research shows could be as many as half of all investors." Read the original story from The Wall Street Journal.

 

 

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