If a tree falls in a forest and no one is there, does it make anoise? If a very credible and well-recognized investment researcherconvincingly refutes an oft-misquoted study and no one paysattention, does that refutation still exist?
The two “BHB” papers—the first one published in 1986 by Brinson,Hood, and Beebower, and the second published in 1991 by Brinson,Singer, and Beebower—are often incorrectly cited as “proof” thatasset allocation is responsible for 91.5 percent of a portfolio’sinvestment returns.
This “evidence” is then used to convince investors (bothprofessionals and retail clients alike) that stock selectiondoesn’t matter. In the end, goes this logic, asset allocationtrumps stock selection.
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