JMF Capstone Wealth ManagementHard To Time Outperformance – JMF Capstone Wealth Management https://www.jmfcapstone.com An Alabama registered investment advisor Fri, 21 Nov 2025 19:30:19 +0000 en-US hourly 1 https://wordpress.org/?v=5.1.22 Hard To Time Outperformance https://www.jmfcapstone.com/2014/05/13/hard-to-time-outperformance/ https://www.jmfcapstone.com/2014/05/13/hard-to-time-outperformance/#respond Tue, 13 May 2014 15:39:01 +0000 http://evolvemypractice.com/?p=912 The efficient market hypothesis asserts that financial markets are “informationally efficient”; that is, investors shouldn’t expect to consistently achieve returns in excess of average market returns on a risk-adjusted basis, given the information available at the time the investment is made. However, we know that the market isn’t perfectly efficient. In fact, as I explained in my Seeking Alpha series on...

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]]> The efficient market hypothesis asserts that financial markets are “informationally efficient”; that is, investors shouldn’t expect to consistently achieve returns in excess of average market returns on a risk-adjusted basis, given the information available at the time the investment is made. However, we know that the market isn’t perfectly efficient.

In fact, as I explained in my Seeking Alpha series on the subject, it doesn’t hold for any of the three forms of market efficiency: strong; semi-strong; or weak. However, there’s a large body of evidence demonstrating it succeeds in the only way that really matters: There are fewer active managers that outperform appropriate risk-adjusted benchmarks, after expenses, than would be randomly expected. In addition, there’s little to no evidence of persistence of performance beyond the randomly expected.

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