Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Investment’

The Mental Mistakes That Active Investors Make

Posted by hkarner - 11. Februar 2020

Date: 10‑02‑2020

Source: The Wall Street Journal

Why is it that amateur investors still believe they can beat the market when all the evidence suggests they can’t? It has to do with how our minds work

In the battle between passive and active investing, there’s no question: Passive has been the clear winner. For years, the flow of new assets has gone more to low‑cost, widely diversified index mutual funds and exchange‑traded funds, rather than to actively managed funds.

It makes sense. There is much evidence that passive investors, who are content to match the market, earn higher returns than active amateur investors, who strive to beat the market.

That’s true even for investors who delegate their investments to managers of active mutual funds. Managers of active mutual funds do beat the market on average, but the fees they charge equal or exceed the extra returns they generate. Den Rest des Beitrags lesen »

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The Power of Green Public Finance

Posted by hkarner - 28. November 2019

Werner Hoyer

Werner Hoyer is President of the European Investment Bank.

In addition to visionary leadership and a mobilization of businesses, citizens, and civil-society groups, confronting climate change will require massive investments. We cannot count on governments alone to put up the money; rather, we must use public finance to leverage the power of private capital.

LUXEMBOURG – Policymakers and pundits have been wringing their hands over the crises afflicting the European Union, arguing that it is falling behind in confronting major threats to its long-term survival. Yet on the issue of climate change, nothing could be further from the truth. In mid-November, EU member states demonstrated that they can unite behind a shared vision of a low-carbon future. And European institutions are already leading the fight against climate change at the global level. Among these, the European Investment Bank will now be playing an even greater role as an instrument for decarbonizing the economy and limiting global warming to well below 2°C above pre-industrial levels.

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Why Markets Are Rising Despite a Trade War, Brexit and Impeachment Threats

Posted by hkarner - 20. Oktober 2019

Date: 19-10-2019
Source: The Wall Street Journal

Many investors are watching the Fed while not trading geopolitical events

Some investors say they aren’t trading geopolitical events such as Brexit and the impeachment inquiry in the U.S.

The world seems more tumultuous than it has in years. Congress is weighing impeachment, the U.K. is on the verge of a momentous vote regarding its role in Europe, and the U.S. and China are still mired in a trade war.

Yet the S&P 500 is within about 2% of its all-time high. What’s going on with Wall Street?

For many money managers, the answer has a lot to do with the Federal Reserve. The central bank has already lowered interest rates twice this year and is widely expected to do so at least once more in 2019 to help support a slowing economy. Den Rest des Beitrags lesen »

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When God Is Your Portfolio Manager

Posted by hkarner - 12. Oktober 2019

Date: 12-10-2019
Source: The Wall Street Journal By Jason Zweig

Biblically responsible investing is booming, as some Christians move to match their faith with their stock buys

What would Jesus buy?

That question is spreading in the investing world, as evangelicals and other Christians seek investment management and financial planning to match their interpretation of biblical principles. The latest sign of the rise of faith-based investing was the launch of the Inspire International ESG exchange-traded fund on Sept. 30. Its ticker symbol? WWJD, short for the popular expression “What would Jesus do?”

Many socially responsible investors favor companies that recruit LGBT workers or donate to Planned Parenthood and the like. By contrast, biblically responsible investors shun companies that profit from or support abortion, pornography, gambling, or LGBT issues. Den Rest des Beitrags lesen »

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The Europeans want their own Vision Fund to invest in tech

Posted by hkarner - 31. August 2019

Date: 30-08-2019
Source: The Economist

They might even get it

How much does it cost to bend the future to one’s will? Give or take $100bn, reckons Masayoshi Son, boss of SoftBank. That is the size of the Japanese conglomerate’s Vision Fund, which holds stakes in modish technology companies including WeWork and Uber. Mr Son is raising a new, similarly gargantuan pot.
Now the eu wants one, too. On August 22nd news filtered out of a proposal to create a €100bn ($111bn) fund to back European firms in “strategically important” industries.

Its proposed name and high-tech focus notwithstanding, the European Future Fund would hark back to decades past. Politicians across the old continent once believed themselves blessed with the gift of picking corporate winners. That 1970s experiment did not end well: “national champions” backed with taxpayers’ money were kept on life support with yet more of it.

Concerns about Europe falling behind in technology, too, are old hat. In the early 2000s France and Germany were so worried about Google that they lavishly funded Quaero, a made-in-Europe search engine. A few years and tens of millions of euros later, the project was quietly deleted. Den Rest des Beitrags lesen »

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About to Retire? Check Your Stock Exposure—Quickly

Posted by hkarner - 6. August 2019

Date: 05-08-2019
Source: The Wall Street Journal

We ran a simulation showing how various portfolio allocations performed for someone who had retired in 2000—and it was revealing

There are a lot of people thinking of retiring now because the bull market has boosted their 401(k)s.

But they may need to re-evaluate their allocations. And quickly.

Over the past decade, the S&P 500 has returned more than 13% on an annualized basis. And studies show that this is exactly when a lot of people choose to retire—the height of a bull market, when their portfolio is plump.

But those same studies show that people who retire at bull-market peaks have a higher chance of running out of money. That is because they wrongly assume big returns will continue to pile up—and then they lose a big chunk of cash when bear markets arrive.

So, investors about to retire may want to re-evaluate how their money is allocated. To assist in that effort, we ran a simulation showing how various portfolio allocations performed for someone who had retired in 2000, the beginning of a bear market, followed by another later in the decade. Den Rest des Beitrags lesen »

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Lots of investors bet on “factors”, such as size, value and momentum

Posted by hkarner - 21. Juli 2019

Date: 18-07-2019
Source: The Economist

But what if the crowd catches on?

The final of the European Football Championship in 1976 was settled by a penalty shoot-out. The winning kick, scored by Antonin Panenka of Czechoslovakia, was a thing of beauty. From Panenka’s long run-up and body shape, the West German goalkeeper, Sepp Maier, guessed that the kick would go hard to his left. He dived in anticipation. But Panenka did something novel. He calmly chipped the ball down the centre of the goal, which Maier had just vacated.

Armed with this story, we come scrambling back to the present to contemplate another game of fine margins: investment. Here too success often depends on the ability to outwit others. Indeed proponents of factor investing—buying baskets of stocks with characteristics that have been shown to beat the market averages—say it works by exploiting the enduring weaknesses of investors. If the dumb money keeps shooting for the corners, you profit by going down the middle. Just hold your nerve. Den Rest des Beitrags lesen »

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How Should We Then Invest?

Posted by hkarner - 27. Januar 2019

January 25, 2019

To be absolutely certain about something, one must know everything or nothing about it.“

—Henry Kissinger, former US Secretary of State

This month I’ve discussed some possible pathways for 2019. But beyond that, for the past year or so, I have been talking about what I think may unfold over the next decade. The term I often use is The Great Reset, but in my mind it’s more than just resetting global debt.

I think a number of equally important trends, all extraordinarily eventful, some amazingly positive and some frustratingly negative, when taken all together (which we’ll have to, like it or not) will produce an era unlike anything previously seen in human history. I call it the Age of Transformation. Den Rest des Beitrags lesen »

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Morality and Money Management

Posted by hkarner - 25. Januar 2019

Robert J. Shiller, a 2013 Nobel laureate in economics, is Professor of Economics at Yale University and the co-creator of the Case-Shiller Index of US house prices. He is the author of Irrational Exuberance, the third edition of which was published in January 2015, and, most recently, Phishing for Phools: The Economics of Manipulation and Deception, co-authored with George Akerlof.

Following his recent death, Vanguard Group founder Jack Bogle was widely and generously eulogized – and justifiably so. But if everyone followed Bogle’s investment strategy, market prices would turn into nonsense and would provide no direction to economic activity.

NEW HAVEN – The death on January 16 of Jack Bogle, the founder of the investment company Vanguard Group, was met with a slew of flattering obituaries. Of course, obituaries often praise their subjects. But Bogle’s seemed more laudatory than usual. And I think there is a reason: Bogle was an unusually morally directed man.

Of course, we cannot judge his success by his personal wealth. When Bogle established Vanguard in 1975, he set it up as a nonprofit. The company has no outside shareholders; all profits are reflected in lower fees, not dividends.

By metrics other than founder wealth, the Vanguard Group is a huge success. It invests for 20 million people in 170 countries. It has $4.9 trillion in assets under management. It may be the world’s most significant investment company. Den Rest des Beitrags lesen »

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The World Economy Goes Hollywood

Posted by hkarner - 21. Januar 2019

Anatole Kaletsky is Chief Economist and Co-Chairman of Gavekal Dragonomics. A former columnist at the Times of London, the International New York Times and the Financial Times, he is the author of Capitalism 4.0, The Birth of a New Economy, which anticipated many of the post-crisis transformations of the global economy. His 1985 book, Costs of Default, became an influential primer for Latin American and Asian governments negotiating debt defaults and restructurings with banks and the IMF.

In a world where “nobody knows anything,” investors may be no better than film-studio moguls at predicting the future. If so, then markets, instead of being predictive, become increasingly reactive, simply extrapolating recent events.

LONDON – If there is one useful conclusion that economists and investors can draw from the crazy year that has just ended – indeed, from the whole crazy decade since the Global Financial Crisis of 2008 – it is this: As they say in Hollywood, “Nobody knows anything.” In the film industry, the richest and most experienced studios and producers spend vast amounts of time and money on audience research, but still have no idea if their latest creations will turn out to be hits or flops. So why be surprised if the same is true of financial markets – or, for that matter, of commodity prices, policymaking, and corporate performance?

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