RT Journal Article SR Electronic T1 Five Principles to Hold Onto (Even When Your Boss Says the Opposite) JF The Journal of Portfolio Management FD Institutional Investor Journals SP 25 OP 41 DO 10.3905/JPM.2009.35.2.025 VO 35 IS 2 A1 Laurence B Siegel A1 M. Barton Waring A1 Matthew H Scanlan YR 2009 UL https://pm-research.com/content/35/2/25.abstract AB 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