Being aware of prospect theory can prevent individuals engaged in active investing from making poor financial choices.
Knowing about anomalies is important for individuals who want to utilize active investing strategies.
Individuals who are considering the use of active investment strategies might benefit from being aware of both confirmation and hindsight bias.
Individuals who participate in active investing should be aware of the concept of anchoring.
Individuals who take part in active investing can benefit from being aware of the tendency of overconfidence that is experienced by many market participants.
Modern portfolio theory has been advocated by finance experts for decades, but it has lost some of its credibility in the recent financial crisis and subsequent bear market.
Exchange-traded funds offer a number of different opportunities to investors who choose to employ active strategies rather than the passive investing approach.
Although finance experts frequently advocate buy and hold strategies, which involve the purchase and retention of stocks over long periods of time, certain market participants have challenged this approach and instead now advocate active investing strategies.
A lot of ground gets covered in this interview with Jim Lonergan of the Connors Group, including the high degree of correlation between asset classes, and why cash is an effective tool for preserving capital in poor market conditions.
Tags: cash, correlation, risk management
Market experts who advocate active investing strategies and their opponents have invested significant time into either supporting or refuting random walk theory.