Don't let fund managers mess with your mind
When he was once asked if there was ever a case for using actively managed funds, the Nobel Prize-winning economist Eugene Fama fired a question back: “Why do we pay people to do something they cannot do?”
How to respond to scary markets
It’s been an uncomfortable year for equity investors to say the least. Stock markets around the world have fallen, some more than others. Russian stocks have crashed, and investors in some funds have been unable to get their money out.
Confirmation Bias
That human beings have an inbuilt tendency to look for and favour evidence that confirms their pre-existing beliefs – about investment, politics, or any other subject – is not a particularly new or radical idea.
How to combat recency bias
You’re sitting in your favourite restaurant, feeling famished. The waiter arrives and reads out a long list of mouth-watering specials. Yet the moment he walks away, you find you can recall only the last item on the list. Congratulations, you’ve been struck by recency bias.
The New Future Shock
It’s now half a century since the American writer Alvin Toffler released the best-seller “Future Shock”, about what happens to societies overwhelmed by rapid change. While not claiming to be prophesy, Toffler’s book still resonates 50 years on.
Patience is a virtue
It’s infrequently remarked upon in the financial media but many of the keys to success as a long-term investor derive from qualities that are distinctly out of tune with the times – patience, discipline and a readiness to prioritise distant rewards over instant gratification.