@article {Siegel25, author = {Laurence B Siegel and M. Barton Waring and Matthew H Scanlan}, title = {Five Principles to Hold Onto (Even When Your Boss Says the Opposite)}, volume = {35}, number = {2}, pages = {25--41}, year = {2009}, doi = {10.3905/JPM.2009.35.2.025}, publisher = {Institutional Investor Journals Umbrella}, abstract = {Although finance practitioners almost universally learn in school that the Sharpe market model, which separates all returns into alpha and beta, is the starting point for a number of key investment insights, they often forget, or disregard, this knowledge once they are on the job. The five most important insights that a practitioner should hold dear, regardless of what the boss says, are 1) the importance of making alpha and beta decisions separately; 2) the zero-sum nature of active management; 3) the different criteria needed to make alpha and beta decisions; 4) the great value of alpha successfully delivered; and 5) the desirability of paying appropriate fees for each return component or, in other words, high fees for alpha, low fees for beta.TOPICS: Portfolio theory, in markets, exchange-traded funds and applications}, issn = {0095-4918}, URL = {https://jpm.pm-research.com/content/35/2/25}, eprint = {https://jpm.pm-research.com/content/35/2/25.full.pdf}, journal = {The Journal of Portfolio Management} }