Jump to content

Appropriate time-frame to measure portfolio performance


tede02
 Share

Recommended Posts

I recognize there is no correct answer to this question, but I'm looking for some opinions.  I believe Buffett has stated he thinks 3 years is appropriate.  I've always thought that the best time-frame is an entire market cycle (top to top or bottom to bottom) because one hot asset class that the market runs up (and eventually down) can really distort relative performance. 

Link to comment
Share on other sites

I agree with a 5-7 year market cycle.

 

Longer history is better than shorter. However, successful managers attract asset inflows and might not be able to deliver the returns as they grow bigger. This is why I would also look at more recent performance.

 

Starting and ending points also can make a huge difference.

 

 

Link to comment
Share on other sites

I agree with a 5-7 year market cycle.

 

Longer history is better than shorter. However, successful managers attract asset inflows and might not be able to deliver the returns as they grow bigger. This is why I would also look at more recent performance.

 

Starting and ending points also can make a huge difference.

 

 

 

I think your last statement is so important.  Think of all the young bucks who started their investment careers in late 2008 or early 2009.  Although there have been some hiccups along the way, the broadly rising tide following the Great Recession has lifted everyone's boats.  Now it seems that everyone thinks they are a great stock picker, although in reality the rising market had more to do with most folks' success.  It should be interesting to see what happens when we have a real correction... 

 

For what its worth, I also agree with a 5-7 year market cycle for evaluating performance.   

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...