Sounds like Yiddish for a back seat Saturday night escapade, doesn't' it? But...it's not.
The Stutzer index is a tool for analyzing investment performance. It’s nice for hedge funds in particular, since it doesn’t assume a normal distribution.
The Stutzer index assumes that portfolio managers design investment portfolios with the expected outcome of negative returns over a benchmark converging to zero in the long-run. It works by favoring higher values, and penalizing underperformance. This results in the index favoring portfolios with fewer extreme variations, which should give the portfolio a better-than-average shot in market returns.
The nice thing about the Stutzer index is that it’s more robust than some really basic investment portfolio performance measures, but it’s still accessible enough that you could do it on a spreadsheet.
However, it does take a lot of data over time before it will give you legit results. Also, it doesn’t take into account the fact that people get more risk averse as they get closer to retirement...or that, maybe the other way around, people get less risk averse as they have more money to play with.
Related or Semi-related Video
Finance: What is Alpha?11 Views
Finance allah shmoop what is alfa All right well you've
heard of the alfa dog the alfa male an alfa
bet soup investing alfa is good when you have a
lot of it If your index iii the set of
investment returns numbers you were being measured against was saying
the s and p five hundred and it went up
eleven percent last year and you ve a trading or
investing in stocks and maybe options and whatever other vehicles
you deployed like dead and you know leverage and you
were on lee up eight percent last year Well then
you had low alfa sorry just keeping it real You
actually destroyed value after all your hard work from that
year you could have done nothing I he just let
your money sick and an s and p five hundred
index fund played golf all day and night If you
you know had those glow in the dark ball thing
is and you would have done three hundred basis points
better than you did trying teo you know outsmart mr
market So hi alfa Good low alfa bad unlike your
depressing golf score ask sophie if you need some help 00:01:09.415 --> [endTime] Home
Up Next
What is an institutional investor? Hit play to find out
Reading the tarot cards. Sifting the tea leaves. Asking the crystal ball. Trying to predict the future performance of an investment is something th...