TY - JOUR T1 - Five Principles to Hold Onto (Even When Your Boss Says the Opposite) JF - The Journal of Portfolio Management SP - 25 LP - 41 DO - 10.3905/JPM.2009.35.2.025 VL - 35 IS - 2 AU - Laurence B Siegel AU - M. Barton Waring AU - Matthew H Scanlan Y1 - 2009/01/31 UR - https://pm-research.com/content/35/2/25.abstract N2 - 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 ER -