Economics for Independent Thinkers is useful to practitioners who make economic forecasts. Investment strategist Daniel Nevins, CFA, recounts becoming a skeptic about the application of quantitative methods to economics and about standard prediction methods, such as the lagging nature of consumer confidence surveys. He especially disdains economists who strive to make reality fit their models.
This comprehensive study of the structure, price dynamics, and valuation of exchange-traded funds (ETFs) addresses their current uses in various investment settings. It attributes the rapid growth of ETFs to factor-based investing and the rise of robo-advisers. The book is a fascinating deep dive into all categories of ETFs, including equity, fixed income, foreign currencies, and alternative investments, with a particular focus on issues of tracking and liquidity.
The "Future State of the Investment Profession" explores evolving states of trust and their interdependence with demonstrating and creating value. To get a better understanding of what it means for investment professionals to provide value and how that relates to building trust and improving investor outcomes, we discussed these topics with Anne Cabot-Alletzhauser.
Richard Thaler reviewed many of our behavioral frailties during his lively and engaging presentation at the 70th CFA Institute Annual Conference in Philadelphia. The key takeaway, according to Shreenivas Kunte, CFA: If only we could learn.
Leading posts from August include Preston McSwain's call for more honest and accurate fee disclosures and performance reporting; an examination of Sam Zell's take on the economy by Julie Hammond, CFA; tips on how to ace job interviews by Julia VanDeren; Will Ortel's exploration of what's in a hedge fund name; and an analysis of capital markets during times of war by Mark Armbruster, CFA.
Before the Nutrition Label and Education Act of 1990 mandated the ubiquitous nutrition fact label, consumers did not always know what was in the food they ate. Could investors today use a similar solution when it comes to what's in their portfolios?
Leading econometricians address the issue of statistically identifying and measuring business cycle regimes and turning points. They provide a framework for modeling and predicting cyclical shifts. This work is relevant for investment managers interested in matching business cycle analysis with asset allocation decisions.
Northern Trust CIO Robert P. Browne, CFA, discussed how asset allocation decisions are made using quantitative methods, while the underlying (active) portfolios are often run by managers from the fundamental school of investing, at the 70th CFA Institute Annual Conference.
Norb Vonnegut culls three lessons from HBO's recent Bernie Madoff biopic. Taken together, they serve as a renewed prompt for investors to consider low-cost index funds. After all, these funds are hardly exclusive. The world is vetting them constantly. So long as investors reinvest dividends and other cash flows back into the funds, the annualized returns are a real measure of investment performance: What you see is what you get. And what’s better than that?
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