Like it or not, forecasts are unavoidable. Whether we’re overweighting or underweighting an asset class – or even sticking to a benchmark – we are making an implicit forecast.
Having a framework to evaluate how well we forecast and translate predictions into performance – through both calibration and implementation – has always been important to me.
That’s why I’ve developed a novel method to assess the quality of forecasts and the decisions they drive in portfolio management.
I explain everything in the article below. Enjoy the read!