Question of the Week – Portfolio Management

Dividing any work into teams brings many positive results.
But there are some specific downsides within portfolio management. Risk, for
instance, is difficult to divide up. By applying the risk metrics to each team,
the portfolio will be overly conservative (because each team diversifies the
other). Additionally, there can be extra trading which may be inefficient from
a tax standpoint (currently, in the U.S., for instance, appreciation on
investments owned for less than a year is taxed at a higher rate than for
investments owned for more than a year).