Keep Digging? Fancy Math Is Not WOrking.

Definitions of Fancy: Expensive, Exclusive, and Elaborate.

And our Desires, Hopes, and Dreams of what ‘fancy’ will accomplish.

Fancy math suggests lower risk and greater reward.

Over the last 25 years (or rolling long term investment horizons of clients), old MPT believers or daily liquid equity indexes have won  over fancy. For a very long time an entire industry has been and continues to present ’Expensive, Exclusive, and Elaborate’ asset allocations.

With the ‘Desires, Hopes, and Dreams’ of beating a benchmark, net of fees.

An entire generation of college graduates have been taught fancy math and believes in the face of overwhelming evidence, ‘fancy’ works in real life. Even more surprising is their belief they can beat the benchmark because they can do the fancy math.

Should we stop digging?

Or at least teach the old stuff again?