Style & De Stijl, or Morningstar & Mondrian: The Use & Misuse of Style Boxes
Posted: 18 Jul 2004
Date Written: July 8, 2004
Graphics distill and convey information. The clarity and power of the simple style box efficiently conveys two vital dimensions of investment style for equities-valuation and size. In promoting awareness of style variations, style boxes - Morningstar's particularly - have advanced investment literacy. However, as currently constructed, the style box misleads, and can induce unwanted behavior and unintended consequences.
Keywords: Portfolio management, investment style, behavioral finance
JEL Classification: G11, G23
Suggested Citation: Suggested Citation