With much of the developed world in a sovereign debt crisis, what implications will this have on your portfolio risk profile, benchmark, and asset allocation? Having spent his entire career in emerging market and non-U.S. investments, Jeffrey P. Davis, CFA, describes what he believes is a fundamental shift in the global market portfolio.
Richard Marston certainly has the credentials to author a book on portfolio design. Currently the academic director of the Private Wealth Management Program at the Wharton School of University of Pennsylvania, he has taught in five countries, is the recipient of both a Rhodes Scholarship and a Fulbright Fellowship, and—perhaps most relevantly—has taught asset allocation to more than 5,000 financial advisers as a faculty member in the Certified Investment Management Analyst program. Marston has accomplished what many investment academics find difficult—namely, produce a book that is truly practical and “hands-on” for both financial advisers and investors. Portfolio Design: A Modern Approach to Asset Allocation deftly combines rigorous academic research with everyday investment experience to provide a guidebook to the complexities underlying portfolio design and asset allocation.
Steven J. Sherman discusses the role of the International Valuation Standards Council and how it differs from that of the accounting standard setters. Mr. Sherman also provides his thoughts on the large number of restatements by public companies in recent years due to valuation issues.
Who says that one bad apple doesn’t spoil the whole bunch? Just ask FrontPoint Partners who saw its assets under management decline with breathtaking speed—dropping by $6 billion in eight months—after one of the firm’s portfolio managers was caught… READ MORE ›
In August 2007, the head of AIG’s financial products division stated, “It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar” in any credit default swap (CDS) transactions. Five months later, AIG disclosed that it had lost not $1.00 but $5 billion on its CDS exposure. This turn of events is just one example of sophisticated financial institutions’ hugely misjudging the risk of “financial weapons of mass destruction.” The reasons for their systematic failure deserve thoughtful and rigorous study.
Effective financial decision making relies on a proper assessment of the truthfulness of facts. Yet, most people, even professionals, are terrible at spotting lies. Why?
As a former portfolio manager, I know that practitioners often pay too much attention to the micro-level issues of individual securities and not enough attention to the broader macro-level context. Investors often reach for a microscope when they should… READ MORE ›
Emotions can influence financial decisions in surprisingly predictable ways. We tend to be overconfident in our own knowledge and decisions, we extrapolate recent trends while dismissing the past, we refuse to accept losses gracefully by hanging on to our… READ MORE ›
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