More Unconventional Failure

Guest post by Richard (Rick) A. Ferri, CFA, founder of Portfolio Solutions.

Unconventional success from an investment strategy leads to failure for most investors. The excess gains earned by the early adopters of a new investment idea quickly dissipate as growing crowds become increasingly unsophisticated and push down returns. It doesn’t take long before the average return from the strategy falls well below a simple portfolio of index funds.