RT Journal Article SR Electronic T1 The Folly of Hiring Winners and Firing Losers JF The Journal of Portfolio Management FD Institutional Investor Journals SP 71 OP 84 DO 10.3905/jpm.2018.45.1.071 VO 45 IS 1 A1 Rob Arnott A1 Vitali Kalesnik A1 Lillian Wu YR 2018 UL https://pm-research.com/content/45/1/71.abstract AB 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