In this article for the CFA Institute®’s Enterprising Investor blog, CCLA’s investment team looks at the long-run outperformance of ‘quality’ shares over the broader stock market. At times, quality shares may lag the market over shorter timeframes. But they have delivered long-term outperformance for investors with that time horizon.

Key takeaways:

  • ‘Time in the market is better than timing the market.’ It is nigh impossible to tell what style of Over the long term, quality shares have significantly outperformed the broader stock market.
  • Quality shares have done well because they compound longer, uninterrupted periods of positive returns, and they suffer less than the broader market in a downturn.
  • If history is a guide, the price to pay for quality to outperform is patience. It is critical that investors take a realistic view of the relevant time horizon to achieve this outperformance.
     
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CFA Institute® is a global, not-for-profit professional organization that provides finance education to investment professionals. Enterprising Investor is its forum for provocative and useful analysis of current issues in finance and investing, written for investment professionals by investment professionals.

Important information
This document is a financial promotion and is for information only. It does not provide financial, investment or other professional advice. Past performance is not a reliable indicator of future results. The value of investments and the income from them may fall as well as rise. You may not get back the amount you originally invested and may lose money. Any forward-looking statements are based on our current opinions, expectations, and projections. We do not have to update or amend these. Actual results could be significantly different than expected.
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