Inalytics CEO Rick Di Mascio contributed to AICIO recent article discussing the line between luck vs. skill in the investment world.
The full article is available for free here
Month: February 2014
Graham Dixon, Inalytics’ Director of Transitions, spoke to Professional Pensions about the importance of strong and effective dilligence for institutions undertaking transitions.
Read the full article here.
Guess what, active Equity Managers have skill and we can prove it.
But before you reach for your pen to write to the FSA to say “I told you so” it isn’t that simple. We discovered when analysing the investment decisions of some 41 Equity Portfolio Managers during 2004 that even some of the most skillful managers diluted their returns by falling into a number of well documented behavioural traps. After all, Fund Managers are human beings.
Contrary to conventional wisdom, Fund Managers don’t run their winners and cut their losers. They do the opposite and it hurts performance.
Our research demonstrates that poor selling negatively impacts returns, on average, by 94 basis points p.a. This is evidence of the Disposition Effect which behavioural finance describes as the outcome where investors tend to lose more money by selling than by chance alone.