The combination portfolio outperformed the momentum version by an average of 1.1 percentage points a year from February 1973 through February 2008, and beat the value version by an average of 6.4 points a year — all while incurring less risk.
Zweig, however, has incurred less risk.
The Richmond, Tex.-based editor offers six model portfolios in funds, gold, stocks and bonds that have incurred less risk than the stock market as a whole, while earning superior returns.
According to the performance monitoring service of The Hulbert Financial Digest, this letter has beaten the market over the last four years by an average of 3.2 percentage points, annualized, while incurring modestly less risk.
But the researchers were able to dismiss this possibility: the average hedge fund managed by someone who went to an institution with higher SAT scores incurred significantly less risk than one whose lead manager attended an institution with lower average scores.
Zweig, however, incurred much less risk.
For the ten-plus years his letter's model portfolio has been rated by Mark Hulbert, it has been a consistently top performer among low-risk letters, growing at an 11.7% annualized rate while incurring 44% less risk than the market as a whole.
Therefore, the negligence rule turns out to be superior, if a market relationship between the parties exists, since it incurs less cost of risk.
"We see no reason for banks to hold back from reducing their charges, or introducing £10 'buffer zones' to basic bank accounts so that low-income customers are at less risk of incurring these charges," she said.
That is, less risk is incurred with the M-form than the unitary form.
By helping people become healthier, and preventing the onset of sickness and disease, plans are at less risk of incurring healthcare costs, while commanding more in reimbursements.
