Has Stock Picking Seen Its Day?

Over the last several weeks there have been a number of commentaries and news items suggesting that stock picking has fallen out of favor and investors, both individual and institutional, are shifting some assets to passive investments, such as index funds and ETFs.  Some commentators have even suggested that stock pickers seek other employment.

Not so fast.  To quote Mark Twain “Reports of my death have been greatly exaggerated.”

Stock picking remains an important alternative in portfolio management.  Portfolio management techniques, like many other things, go through phases.  While it is true that currently there is some general disenchantment with stock picking, this remains a potentially attractive technique and is unlikely to disappear.

Here at Sigma, we view each client as unique, with specific resources, investment objectives and risk tolerance.  We do not believe that portfolio management is a “one size fits all” discipline.  We seek to formulate a strategy that is most likely to meet each individual client’s objectives.  For some, a portfolio of index ETFs may the best approach.  For others, a carefully chosen portfolio of specific stocks and bonds or, in some situations, a combination may be the best alternative.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA®