Why does value investing work? Why do other factor strategies work? For that matter, why does any active strategy — meaning, any strategy other than cap-weighted indexing — “work” in the sense of having a reasonable chance of beating the cap-weighted index other than by random variation?
Congratulations to one of our advisers Professor Samuel Hartzmark from the University of Chicago Booth School of Business for winning the 2019 Exeter Prize for the best paper published in the previous calendar year in a peer-reviewed journal in the fields of Experimental Economics, Behavioural Economics and Decision Theory.
Press reports on contributors to market volatility have long emphasized news about GDP, inflation, and other economic aggregates, but news about policy has become increasingly important.
Investors increase the share of equities in their portfolios by about 0.7 percentage points when the return that they expect to earn on stocks rises by 1 percentage point.
This piece collects perspectives from various industry leaders reflecting on Jack Bogle's contribution to the financial services industry over his long and illustrious career. As the world markets fluctuate and fund managers fight to gather assets, it is worth reflecting on the state of the fund management industry now, which was largely disrupted by Jack Bogle.
As life expectancy increases around the world, investors may soon realize that with longer life also comes a longer liability. Retirement occurs well beyond the "age of 65" as countries around the world increase the retirement ages and eligibility for governmental retirement assistance programs. 2017 Nobel Prizer winner and University of Chicago Booth School of Business Professor Richard Thaler puts it succinctly, "You have to worry about getting unlucky and living to 100."
Given the inherent conflict of interests in the financial adviser industry, since there seems to be a regulatory gap in Asia, the burden falls upon investors to understand the investment management industry. Unsurprisingly, most investors prefer to use simpler assets as store of wealth, such as bank deposits, certificates of deposit, or even real estate.
Investors should be aware of who their regulators are and whether the regulators are well-equipped to be an effective deterrence against potential misconduct by their financial advisers. Investors in areas with a weaker or financially constrained regulator will need to be more active in monitoring their own investment advisers and do not take the fiduciary duty for granted.
P. Brett Hammond, Jr.Martin L. Leibowitz, Laurence B. Siegel Source: The CFA Institute Research Foundation Publications Link to Full Paper. In 2001, a small group of academics and practitioners met to discuss the equity risk premium (ERP). Ten years later, in 2011, a similar discussion took place, with participants writing up their thoughts for this volume. The result is a … Continue reading Rethinking the Equity Risk Premium
Building on the themes from the 2006 conference, this proceedings of the 2008 conference explores what the modern science of life-cycle finance implies for households, businesses, and government with a focus on the retirement phase. Source: The CFA Research Institute.