8 results found

Regulation states that fund managers must not mislead clients. However, subtle nuances around word choice, connotations and links to performance can distort framing. While prescribed scales exist for risk, analysis shows inconsistent application. Gradable adjectives (e.g. strong) can be subjective. Examples like the Beaufort Wind Scale assign words to speeds. Analysis of market data shows the distribution of outcomes. The “Isles scale” maps asset class returns to pre-defined words for given time periods for the purpose of investment communication. Prescribing universal implementation of this approach would remove a dangerous loophole in the regulation.

Behaviour biases determine that performance drives managed fund flows. By examining managed fund transactions, we can confirm that investment adviser engagement with investors is critical, and ascribe a value to it.

Douglas Isles | 0.25 CE

Stars are celebrated yet funds management is a team pursuit. Behavioural finance tends to focus on individuals' biases, but teams' behaviour determines results.

Douglas Isles | 0.50 CE

This paper studies the long-term returns of US equities to determine whether earnings yield is a reasonably reliable estimate of forward real returns. Understanding the interplay of growth, value and yield provides a framework for assessing investments.

Practitioners demand a trifecta from fund managers - performance, simplicity, connection. But many great investments are contrarian and uncomfortable.

Douglas Isles | 0.25 CE

Clients benefit from understanding the investment journey. Having prepared responses to scenarios improves the chance of success.

Douglas Isles | 0.25 CE

Clients benefit from understanding the investment journey. Having prepared responses to scenarios improves the chance of success.

Four common behavioural problems make the journey of investing particularly challenging for many investors. An understanding of each help investors stay the course and meet their goals.