Thursday, December 30, 2010

Window Dressing

Window dressing refers to the practice of fund managers selling underperforming securities just prior to quarter-end in order that those securities don't show up in investor reports as significant positions. Often such fund managers will also buy securities that have performed strongly to make the holdings look good - regardless of what the returns actually are. Essentially this practice is useless and unhelpful, simply a cosmetic affect that adds little or no value.

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