Practical analysis for investment professionals
01 November 2014

Top Five Articles from October: Bond Risks, Myron Scholes, and Discernment

Posted In: Best Of

1. Bonds = Risks

Ever since the bottom of the stock market, if not before, individual investors and many institutional investors have been adding to their bond holdings at a much faster rate than their appreciating equity holdings. While the rush is understandable for those who suffered equity losses by selling in the decline or seeing their wealth on paper shrink, I nevertheless find any stampede a bit scary.

2. Skills That Separate You as an Investment Manger: Discernment

Many investment managers and research analysts think that one of their responsibilities is to discover the very best mental model for their work. I say: the best tool for the job is a better philosophy.

3a. Nobel Laureate Myron Scholes on the Black–Scholes Option Pricing Model

This is the first part of a two-part interview with Nobel Laureate Myron Scholes. In this installment, Scholes shared his perspectives on the Black–Scholes option pricing model, from the motivation and intuition of the original formula to the myriad of extensions.

3b. Nobel Laureate Myron Scholes on the Common Mistakes Research Analysts Make

In an exclusive interview, Nobel Laureate Myron Scholes discusses some of the more philosophical issues about research methods, among them the common mistakes research analysts make.

4. Complexity: The Hidden Cost of Central Bank Actions

Central banks are printing rules almost as fast as they’re printing money. The consequences of that could be large, as could the consequences of printing money.

5. Note to Advisers and Clients: Put Your Investment Plan in Writing

Investment Policy Statements, long a keystone of the institutional investment world, are increasingly catching on with individual investors and financial advisers.

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

Photo credit: ©iStockPhoto.com/erhui1979

About the Author(s)
Paul McCaffrey

Paul McCaffrey is the editor of Enterprising Investor at CFA Institute. Previously, he served as an editor at the H.W. Wilson Company. His writing has appeared in Financial Planning and DailyFinance, among other publications. He holds a BA in English from Vassar College and an MA in journalism from the City University of New York (CUNY) Graduate School of Journalism.

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