The I Ching and stock selection
Only a small portion of the portfolio’s performance is due to stock selection. The figure is roughly 3%. The rest comes from asset and sector allocation. This tells us right up front that the I CHING will not exempt an investor from asset and sector allocation. However, we could use the I CHING for stock picking within each class and within each sector.
Again, the indices such as the SPY and the QQQ would reduce the stock selection risk.
