What Will Be the Best Asset Class in 2014?: Ritholtz Chart

Barry Ritholtz is a Bloomberg View columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He blogs at the Big Picture and is the author of “Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy.”
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Source: JPM Guide to the Markets -- U.S. Data are as of 12/31/13.

Whenever anyone asks me about my favorite sector or market for the coming year, I like to show the table above. While not quite a quintillion-to-one bet, the table reveals what a challenge it is to consistently identify the best asset class for the coming year. No one seems to be able to do it regularly.

The recognition of that truth hasn't stopped anyone from trying, as noted in the Bloomberg News story earlier this week: Hedge Funds' Assets Increase 17% to Record $2.63 Trillion. Hence, the romancing of alpha continues even if it means forsaking beta.

There is a lot of money tied up in this pursuit, and the mere possibility of success has probably lost more money than all the Wolves of Wall Street and Bernie Madoffs combined.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Barry L Ritholtz at britholtz3@bloomberg.net