TY - JOUR T1 - The Folly of Hiring Winners and Firing Losers JF - The Journal of Portfolio Management SP - 71 LP - 84 DO - 10.3905/jpm.2018.45.1.071 VL - 45 IS - 1 AU - Rob Arnott AU - Vitali Kalesnik AU - Lillian Wu Y1 - 2018/10/31 UR - https://pm-research.com/content/45/1/71.abstract N2 - The standard procedure of firing losing managers and hiring winning managers based on their past three-year performance leads to losses. Investors need to look forward—not just back—when allocating to fund managers by using a measure of expected fund returns that considers factor exposures, fees, manager skill in security selection, and factor expected returns estimated based on relative valuation. As investors and their consultants gain a better understanding of the predictive efficacy of relative valuations in factor and strategy performance, they gain an objective reason to avoid the blunders of performance chasing.TOPICS: Manager selection, performance measurement ER -