Adding alpha returns of all active investors while ignoring transaction costs such as fees and expenses does not guarantee positive returns. For active investors to realize positive returns, the market must be favorable as well as satisfy several factors. First, active investors should carefully select investment opportunities that lie above the market line. The market line provides a benchmark for evaluating the performance of an investment (Foster, 2010). The probability of getting positive returns also depends on chance. Therefore, an active investor may project that a particular investment will deliver positive returns but, selection strategies fail to deliver the Continue reading...