Joachim Klement, CFA, is Head of Investment Research at Fidante Capital and a trustee of the CFA Institute Research Foundation. Previously, he was CIO at Wellershoff & Partners Ltd., and before that, head of the UBS Wealth Management Strategic Research team and head of equity strategy for UBS Wealth Management. Klement studied mathematics and physics at the Swiss Federal Institute of Technology (ETH), Zurich, Switzerland and Madrid, Spain, and graduated with a master’s degree in mathematics. In addition, he holds a master’s degree in economics and finance.
The common assumption is that lower tax rates should increase corporate profits, share prices, investment, and consumption, and thus lift the entire economy. Unfortunately, this is not quite how it happens in the real world.
Stop losses may not enhance returns, says Joachim Klement, CFA, but they enhance client well-being, and in the end, they may keep a client from selling what is otherwise a great long-term investment.
One of the symptoms of middle age is that you start to give advice to younger people on what your experience has taught you about life. So Joachim Klement, CFA, puts his imaginary pipe into his mouth, adjusts his glasses, and explains why keeping it simple might be the most important "dumb alpha" lesson he has learned in his investing career.
Instead of creating complex multilinear factor regressions, investors can outperform the market simply by selecting the stocks with the smoothest return profile — good, old, boring stocks that show no drama and a lot of stability, writes Joachim Klement, CFA.
Joachim Klement, CFA, demonstrates a method for beating average hedge fund returns — without the fees. It's the best dumb alpha can offer: a simple, low-cost investment strategy that outperforms more sophisticated and expensive alternatives.
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