Posts that discuss topics in asset allocation
Quantitative investment firms such as Two Sigma, AQR, Dimensional, etc. have built their success on a foundation of data and analytics. Asset owners, financial advisors, and fundamental asset managers now have an opportunity to use similar analytics and approaches to Read More …
We are at a point in time where the convergence of several factors has the potential to meaningfully change investing, and the business of investing over the next decade. There is a need to thoughtfully examine these factors and initiate a Read More …
Earlier this year I had written about the behavioral implications of high expected returns (see High Cost of High expected returns). Two recent articles in the Economist and Bloomberg Gadfly highlight the increasing awareness that a more informed dialog is Read More …
Using asset returns to discount liabilities has important behavioral implications Choice of a discount rate should not impact investment strategy Pensions and endowments might create issues for themselves by relying on high expected returns How do you think Read More …
On February 4th, I had the good fortune to lead a lively breakfast discussion on Smart Beta, hosted by Moodys Analytics’ subsidiary Copal Amba. While most of the attendees were from the product side, i.e. asset managers, there was a Read More …
When making an assumption on the expected return of an asset, one is making an implicit call on the valuation of that asset. There are several textbooks written on valuation, and smart individuals have built successful careers on sophisticated valuation Read More …
In its Third Quarter 2014 publication of Alternative Thinking, AQR discusses how our behavioral biases as investors can affect potential returns. The entire article is an excellent read and focuses on return chasing, under-diversification, and comfort-seeking while selecting investments. Two particular biases Read More …