The Incredible Shrinking Alpha
The Incredible Shrinking Alpha is a quantitatively chilling tale that explains in academic yet simple terms what is happening to the alpha for which so many investors yearn. Offering compelling data from decades of academic research, this book presents the hard truth—it's not worth the time or effort spent battling to win those few extra cake crumbs. Instead, focus on the things you can control and discover what life has to offer beyond the quest for alpha.
Praise for The Incredible Shrinking Alpha
"If you think you can beat the market, you need to read this wise book. Swedroe and Berkin show that whatever superior investment performance you may achieve is fully accounted for by the risks you are taking with your money and even risk compensation may be shrinking as well. But there are things you can do, and the authors suggest a number of sensible strategies to improve investment results."
— Burton Malkiel, Author of A Random Walk Down Wall Street
"Swedroe and Berkin provide a concise treatment of the research passive and active investors need to become more successful. This treatment also appeals to college finance students seeking to gain a better understanding of passive versus active investing. The authors enable investors seeking to generate real alpha to understand that passive investing is increasingly the correct approach, while active investing is just the opposite."
— John Haslem, Professor Emeritus of Finance, University of Maryland
"Piece by piece, the authors peel back the claims that active managers can add value to a system where it gets harder and harder to generate Alpha. Swedroe is the master of explaining financial research in terms that every reader can easily understand. Read and improve your financial acumen."
— Francis Armstrong III, Author of The Informed Investor and Investment Strategies for the 21st Century
"Based on decades of research and my personal experiences, I too gave up the quest for alpha long ago. I hold an endowed chair in investments and am a member of The Wall Street Journal Experts panel. Yet, I do not own a single individual stock or corporate bond. Rather, I invest in low-cost passive mutual funds and ETFs. Swedroe and Berkin demonstrate how this strategy can be used to achieve a prudent, globally diversified portfolio."
— William Reichenstein, Investment Professor at Baylor University
"In this short but powerful book, Swedroe and Berkin have advanced the debate on active v. passive to a new level. Their discussion of how alpha has steadily morphed into beta is the best description I've read of this process yet."
— Edward Wolfe, Professor Emeritus of Finance, Western Kentucky University
"Swedroe and Berkin roll up their sleeves and dig into decades of research to help us better understand how markets work. The result is a clear and concise synthesis of how investing can indeed be a winner's game."
— Tobias Moskowitz, Fama Family Professor of Finance, University of Chicago Booth School of Business