The Link Between Decision-Making and Investment Returns
It exists — we just proved it.
It exists — we just proved it.
Unlike past portfolio performance, this measure of investment decision-making skill exhibits a statistically-significant relationship into the future.
It’s the standard for reporting, but when it comes to identifying actual decision-making skill — whether you’re a portfolio manager or an allocator of capital — performance attribution leaves a lot to be desired. But there’s an alternative: decision attribution.
In today’s market environment, investors are seeking openness and a thoughtful plan for future improvement — not past perfection.
How do you show investors your prudence and discipline in managing their capital when your performance-based metrics don’t tell a great story?
Active managers need to start incorporating the lessons of behavioral science if they have a chance of reversing the flow of assets into passive investment vehicles.
We've updated our popular guide to behavioral science literature, adding some exciting new titles, handy subject categories, and the pick of our team's favorite reads. Happy reading!
Times like these are when it’s both most important and most difficult to make deliberate, mindful decisions. These leading investment coaches have some suggestions.
In my last blog post, I mentioned an objection we often hear from managers who are reticent about working with Essentia: “I’m afraid it will mess with my process”. This post offers a real-life example.
“I’m afraid of messing with my process. It might make me worse” - this is one of the most common objections we hear at Essentia.