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Lessons From the Year’s Top-Performing Advisers

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The top newsletter in the Hulbert Financial Digest’s 2019 performance rankings was fully invested in stocks throughout the year, and never sold a single share of stock.

The second-place newsletter, in contrast, began with 35% allocated to cash and made frequent purchase and sale transactions throughout the year.

Welcome to the complicated world of drawing investment lessons from the top-performing newsletter.

As you contemplate these disparate strategies of the top performers, you should know that there is a similarly wide range among the strategies pursued by the newsletters at the bottom of the 2019 rankings. The newsletter with the lowest 2019 return started the year with 50% cash, for example, while the newsletter with the second-lowest return was fully invested throughout.

Nor was 2019 unique. I have consistently found from my 40 years of tracking the performance of investment newsletters that, in the right hands and circumstances, almost any approach can work. And, by the same token, in the wrong hands or circumstances, virtually any strategy can lag.

In other words, past performance is going to be of only very limited use in determining which particular stock-picking or market-timing strategies will work best in the future.

While you might be disappointed that the performance rankings don’t tell you which........

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