One Common Trait Amongst All Active Managersby Tim Bock
Active management is the traditional way of building a stock portfolio, and includes a wide variety of strategies for identifying companies believed to offer above-average prospects. One method might focus on companies with impressive past growth in sales and profits, another on companies with promising new products, a third on "turnaround" potential of distressed firms, and so on. Another active management method known as technical analysis attempts to find "patterns" in price movements to predict the future prices. Regardless of their individual approach, all active managers share a common thread: they buy and sell securities selectively, based on some forecast of future events.