With endowment shortfalls still a raw memory, why is the vast majority of the financial services industry still doing financial planning and selling investments as if the world was nice and linear and always normal?
read more Commentary by Stuart FowlerDiversification has failed to protect investors in this bear market in the way they were told to expect. In this article on the company website No Monkey Business explains how the investment management industry (whether focused on traditional ‘balanced management’, new ‘multi-asset class’ or ‘absolute-return’ investing) has failed to develop robust processes for quantifying and controlling client’s risks because it was relying instead on unrealistic benefits from diversification.
read more Commentary by Stuart FowlerThe diversification of individual risks, which increases expected risk-adjusted returns, is like apple pie, motherhood and the flag. It is so ingrained in the minds of managers and their clients that this aspect of portfolio theory has remained unchallenged during a period of exceptional creativity in the investment industry.
read more Insights by Stuart FowlerIn a market correction, such as we are experiencing currently, bonds can appear a safe haven. But over longer periods it is bonds that have least to contribute to efficient, diversified portfolios. I touched on this in December. It struck a number of professionals as well as non-professionals as little short of heresy so I decided a ‘chapter’s worth’ on bonds would be a useful ‘primer’.
read more Commentary by Stuart FowlerThis first in a series looks at how individual investors, whether self-guided or as clients of private banks or financial advisers, should form an overview of the role of ‘alternative investments’ in their wealth management. The big picture needs two perspectives: a no-nonsense view of the industry’s sales pitch and practical awareness of how individuals with different wealth levels can get their exposure.
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