As published on Advisor Perspectives June 22, 2020
Is the market environment turning favorable for active equity managers? It seems a strange question to ask in the midst of a pandemic and heightened market volatility, but history tells us that it is during just such turbulent times that active managers excel. There is accumulating evidence that market conditions are growing more attractive for showcasing stock-picking skills.
Recent volatility illustrates how the markets truly are “human institutions” and shows the impact of emotional crowds. Listen in to explore the effect of investor behavior on active equity returns and discover ways to generate alpha by restructuring various aspects of investment management using behavioral factors. Learn proven techniques from manager selection, to security analysis, to portfolio management.
Behavioral finance is sweeping through the financial services industry. Financial advisors are the furthest along, introducing these concepts into their practices, including needs-based planning, outsourcing non-core activities such as investment management, and creating a reassuring behavioral experience for clients.