Tag Archives: investment

3 key psychological challenges for investors

What are the main challenges to achieving good long term returns? Investors focus mainly on what the stockmarket might do; less so on their own behaviour. Some of the human behaviour that confers advantage in everyday life can drive poor investment decisions. The big challenges include; how we search for patterns and trends, the desire […]

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PwC Survey shows slow progress on UK executive pay and bonuses.

The latest PwC survey on executive pay and rewards in the FTSE 100 is presented as an improving trend. Yet it is remarkable that just 36% make full disclosure of bonus benchmarks. There is little sign of realism in incentives; many rewards remain detached from sustainable value creation. Too many do not disclose numbers to […]

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Why are commodities over-represented in indices?

Do investors have an outdate view of commodities? Far from helping to diversify portfolios, or representing a tangible way to benefit from economic growth, commodities have become volatile financial plays. A misguided view of the nature of these assets has resulted in them being over-represented in indices. Indeed, many passive investors may be surprised to […]

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Why was Volkswagen in ESG and Sustainable Investing Funds?

Responsible investing must come clean about Volkswagen. Too many funds rated it highly on Environmental, Social and Governance (ESG). Collateral damage will run well beyond the car sector. Already, the scandal has tarnished the brands of Volkswagen and Germany, with their reputations for trust and engineering excellence. But it is not just about mis-selling cars. […]

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Investors love stories, but no happy ending for Emerging Markets

Investors love a good story, but the latest chapter of the emerging markets growth story has come as a nasty surprise to many. There may be much worse to come. Narratives can help to make sense of facts and figures. Stories can convey meaning, by joining up often unrelated information, and they offer hope. But […]

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Tougher regulation needed for UK listed company directors

A gap has opened up in UK regulation, leaving investors exposed to Companies Act and accounting issues without a clear remedy. Despite all the focus on governance and stewardship, investors are still getting nasty surprises. Tesco and Quindell are perhaps just the highest profile of those involved in further investigations. Making the stockmarket safer should […]

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Not what was forecast: UK index funds lagging active managers

Many UK active funds are now outperforming passive funds. But prejudices rarely disappear when hit with the facts. It is human nature to disregard data that contradicts our misplaced beliefs. This may be why little attention has been paid to the remarkable results of many active UK fund managers – in the face of much […]

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Illusory liquidity and other risks from misguided central bank policy

Does liquidity matter? Not, it seems, to regulators and central banks. Little thought is being given to the global systemic risk created by today’s liquidity illusion. In a world awash with money, trading is actually drying up, with little depth in many markets. Entering positions is easy, but the exit doors could prove surprisingly narrow. […]

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Should we worry about China?

Investors struggle with bubbles. Sure, we know they eventually burst, but lessons are quickly forgotten. Now China is a puzzle: it might look like a bubble, but what to do? Uncontrolled Yen devaluation could break China’s Renminbi peg and trigger more global deflation. But, timing and is hard to assess. Analysts and the press pay […]

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Risks are growing in big equity and bond funds

Money printing and the current stockmarket boom are increasing systemic risk, pushing problems into new areas. Now the questions is; are some asset managers too big to fail? The financial crisis highlighted risks in banks and insurance, but other areas have been overlooked. Finally, regulators are beginning to recognise risks in the investment sector, and […]

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