Hedge Funds
Most long-term approaches to investing, like tactical asset allocation or factor investing, are designed to trade infrequently, generally once a month or once a quarter. This is a feature, not a limitation. Trading infrequently forces a strategy to ignore day-to-day noise and focus on long-term trends. This reduces the negative impacts of turnover, including transaction costs, taxes and whipsaw. (Corey Hoffstein has written an excellent piece on rebalance frequency here). For a number of reasons (but mainly for simplicity’s sake), researchers usually show the historical performance of these infrequent trading strategies based on end of month data. But as we’re about to...

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