In 2009, we published a paper titled “Behavioral Risk” that described the universal tendency to make poor investment decisions in times of crisis because individuals typically allow instinct and emotion to override objective analysis of the pertinent data. The ideas in the paper remain as pertinent as ever. To return investors’ attention to this important topic, we are republishing the paper with comments that reflect the ideas in light of the current environment.
Managing behavioral risk is arguably prerequisite to effective implementation of other risk mitigation strategies. This paper identifies ways investors can counter the urge to stampede for the exits during times of crisis.
An update to our October 2008 web publication, this paper revisits strategic questions and advises investors to think carefully about the economic and political dimensions of investment decisions.
This paper reviews strategic questions and advises investors to think carefully about the economic and political dimensions of investment decisions.
Our letter to the Senate Finance Committee regarding their January 24, 2008, inquiry to large colleges and universities.
A look at the origins and extent of the credit crackup in the United States.
In all developed markets, but particularly the United States, investors’ bias in favor of domestic equities is irrational and sub-optimal. We recommend that investors` strategic equity allocations be equally divided among the Americas, Europe, and Asia.
Asia beckons western investors, its allure predicated on three compelling attractions: Asia beckons western investors, its allure predicated on three compelling attractions: The continued broadening and deepening of relatively immature capital markets whose development will reflect the expansion of most Asian economies at growth rates substantially faster than those of North America and Europe. Reasonable valuations in…
Investors should increase their allocations to Asia at the expense of U.S. and/or European equities.
A detailed discussion of how investors should protect their portfolios and allocate their assets during a bear market. Exhibits include cumulative wealth analyses, U.S. equity returns, price-earnings ratios, and global equity market valuations.