Top Five Articles from June: Behavioral Portfolio Management, the Retirement Crisis
1. Behavioral Portfolio Management: An Alternative to Modern Portfolio Theory
As modern portfolio theory fades in reputation from intense pressure from behavioral finance, many researchers are seeking to fill the void with behavioral finance applications. Behavioral portfolio management is one such model.
2. Behavioral Portfolio Management: Emotions and Volatility Are Key to Successful Implementation
Despite numerous studies attempting to link volatility to changing fundamentals, research shows that investor emotions are the root cause of the vast majority of these price changes, according to C. Thomas Howard.
3. The US Retirement Crisis: Essential Reading and Resources
Financial advisors have an increasingly important role to play in building sustainable retirement income strategies for their clients. But as is the case with most investment advice, there is no one-size-fits-all approach. To help advisors and investors sort through the issues here is a list of essential reading and resources.
As the US Federal Reserve lays the verbal groundwork for an eventual real-world quantitative easing taper, bond prices are dropping at an accelerated rate. In order to understand the ramifications of a Fed taper on the prices of a bond or bond portfolio, what is needed is a bond convexity primer.
5. Book Review: The Physics of Wall Street
James Owen Weatherall argues that given the proven track record of applying ideas developed in physics to finance, it is time to do it again. His book is about the future of finance and the new set of tools that will facilitate the proper functioning of the world’s economies.
Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.
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Great articles!