According to a recent news item by investment newsletter tracker Mark Hulbert, results from tracking both investment newsletter writers, professional mutual fund managers and even individual investors, results attained by measuring the performance of "last year's portfolio" is better, on average, than the results of the current portfolio.
In the newsletter example given, "yesterdays" portfolio beat the current one by, on average, 80 basis points. This is outperformance - measured against one's own investing skills - which is not to be sneered at.
As Hulbert put it, the logical conclusion to arrive at in portfolio changes then becomes ...
... what these results do suggest is that we should place a large burden of proof on making a change in our portfolios. Unless the arguments in favor of such a change are particularly compelling, we probably should simply do nothing.
Doing nothing, however, is harder work than most investors want to subject themselves to.
The Confused Capitalist