How to avoid being hit by a falling star

Three ways to shield your portfolio from the fallout when a celebrity fund manager takes a tumble.

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Anthony Bolton: trouble in China
(Image credit: 2010 AFP)

The trouble with celebrity fund managers is that it's always hard to know if they're good or just plain lucky. Active managers who consistently beat the market over time are vanishingly rare, to the point where even those with lengthy records may simply be the equivalent of a lottery winner who imagines that their numerology "skills" have led them to the "right" numbers. Now that Neil Woodford's winning streak has come to an end, here are three tips to help you avoid being struck by fallen stars.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.