There was a recent article in the FT describing how retail investors in Korea had suffered huge losses after a sharp reversal in the performance of AI-favourites such as Samsung and SK Hynix. The severity of the falls led one investor to ask: When can I get out of this hell? That such market moves Continue reading Too Much Investment Innovation Exploits Investor Behaviour
For a multi-asset investor, being underweight equities is a notoriously painful position. They are typically the highest-returning asset available, and reducing your exposure can hurt both in the short and long run. Does this mean you should always avoid doing so? Not necessarily, but your answer to this question probably says a lot about your Continue reading Would You Ever Underweight Equities?
If you had immediately paused the game after England had taken the lead in the 55th minute of their World Cup Semi-Final match against Argentina, and asked the Argentine players and coaches how they would like their opposition to play for the remainder of the match, they would have probably said something like this: Conveniently, Continue reading The Psychology of England s World Cup Exit
I have a question for you. If you take all of the hearts from a standard deck of 52 playing cards, and then lay them out one by one, in how many different orders can the 13 cards be dealt? For example: J, 7, 5, A, 9, K, 3, 10, 6, 2, Q, 8, 4. Continue reading What Are the Chances of Your Prediction Being Right?
In a world where investors are increasingly being encouraged to react and trade (typically not for their benefit), doing nothing can often prove to be sage investment advice. In a recent paper, Hendrik Bessembinder analysed the performance of “do nothing” portfolios, and shows that even if we are doing very little, the results we achieve Continue reading Nothing in Investing is “Doing Nothing”
I have never been a strong believer in the notion that a fund manager should invest their clients’ assets ‘as if it were their own money’. It is a neat heuristic that I am not sure works consistently in practice. The reality is that there is likely to be a gap between a fund manager’s Continue reading Should a Fund Manager Invest Their Own Money Differently?
As we are currently in the midst of a wonderful summer of sport, I was considering writing a post about the factors which make some sports boring to watch and others exciting.* I am not, however, brave enough to put my head above the parapet on that subject quite yet. Instead, I decided to write Continue reading Behavioural Lessons From the World Cup
There has been plenty of talk about elevated levels of market uncertainty this year, but until very recently equities have been contradicting this notion. When markets are exhibiting pronounced levels of dispersion driven by a singular theme – in this case AI – it is a sign of conviction rather than doubt. Yet the extreme Continue reading The Equity Market is Certain About AI, Perhaps it Shouldn’t…
I recently read an article about another high-profile star fund manager whose performance had been flagging severely. You can probably guess who it was, but that is irrelevant. What matters is the depressingly repetitive pattern of fund managers being lauded as geniuses after a spell of strong returns and dismissed as frauds when gravity brings Continue reading Please, Stop Chasing Fund…
Whenever we experience a spell in financial markets where high quality bonds lose value at the same time as equities a glut of commentaries appear either announcing the death of the 60/40 , showing rising equity / bond correlations or proclaiming bonds have lost their diversifying properties. While part of this is usually an effort to Continue reading Bonds Are Behaving Just Like Bonds