Investing

[ad_1] Will the son of a billionaire perpetuate his inherited wealth? Apparently not, if history is any guide. In fact, there is strong evidence that most “rich families” will be poorer after several generations. Some of the reasons for this are systemic. Taxes, for example, chip away at a family’s […]

[ad_1] Investment performance is assessed on a risk-adjusted basis. But with financial markets growing ever more competitive, private capital fund managers have developed tools to reduce risk while protecting or even boosting their returns. These tools are aligned across two parameters: controls and economics. So, how do the control mechanisms […]

[ad_1] The stock markets over the last two years have been variously nerve-racking and exhilarating depending on who you ask and when. But for behavioral finance aficionados, the COVID-19-era equity markets have offered a rare opportunity to witness an almost never-ending sequence of behavioral biases in action. Indeed, we can […]

[ad_1] Asset Allocation: From Theory to Practice and Beyond, Second Edition. 2021. William Kinlaw, CFA, Mark Kritzman, CFA, and David Turkington, CFA. Wiley. To build a robust investment process, asset allocators must address a long list of issues, including: which assets to choose, how to forecast risk and return, and […]

[ad_1] “A forecast is a prediction; we’re saying what we think will happen. A scenario is different . . . it generally looks much further out and is trying to build a picture of the future in extreme uncertainty.” — Seb Henbest It is impossible to predict the future without […]

[ad_1] Governments worldwide have a long and storied history of directing capital flows to and within private markets to meet public policy objectives. But encouraging private capital is preferable. When generous tax breaks are awarded to wealthy investors and capital commitments are made to subpar fund managers, public accountability requirements […]

[ad_1] The capital asset pricing model (CAPM) is one of the marvels of 20th century economic scholarship. Indeed, its creators took home Nobel Prizes for their efforts, and its insights have helped drive asset allocation decisions since the 1960s. To this day, many graduate school finance professors consider it the […]

[ad_1] Aswath Damodaran doesn’t care how rigorous our valuation methods are. The greatest challenge in valuing companies isn’t coming up with better metrics or models. It’s dealing with uncertainty. In fact, more precisely, the problem is NOT dealing with uncertainty, according to Damodaran. As humans, we tend to respond to […]

[ad_1] Climate crises disproportionately affect women and girls across all demographics, but especially in developing economies. Subject to persistently higher poverty (and extreme poverty) than men, women and girls are also more likely to be impacted by climate disasters. In fact, 80% of those displaced by climate change are women, […]

[ad_1] The finance community has invested much effort to identify new factors that may indicate a security’s forward-looking performance or a portfolio’s risk attributes. While this research can help us better understand asset pricing and offer the possibility of better performance, too often it presumes continuous markets, free trading, and […]