The Surprises From the First Half of 2023 In a recent blog the insightful Charlie Bilello highlighted some of the surprises for the first half of 2023. A tough 2022 wore investors down and consensus sentiment turned very bullish. The recession that never came In December 2022, there was widespread agreement that the U.S. economy…
The Dunning-Kruger Effect – When Little knowledge is Dangerous Humans exhibit a cognitive bias known as the Dunning-Kruger effect, which leads individuals lacking skills or knowledge in a specific domain to draw erroneous conclusions while remaining oblivious to their own inadequacies. Novices often overestimate their ability and competence, while experienced and skilled individuals tend to…
Investing vs. Trading: Understanding the Distinction for Financial Success Are you an investor or a trader? These two approaches represent fundamentally different mindsets and strategies. Failing to understand the difference can lead to disastrous short-term decisions made by long-term investors. Historical data shows that when markets fluctuate, long-term investors often regress to trading behaviour with…
The Rand’s Perfect Storm It is not perchance that we have maintained a significant overweight exposure to offshore assets during the first half of 2023. As much as it pains us to admit, there are moments in time when one concurs with Magnus’s views and this has been one of those periods. From around R17,00…
Understanding the Concept of Risk for Long-Term Investors If you don’t have a proper understanding of what risk means as a long-term investor you will struggle to have the composure required for long-term success. What Risk is Not Contrary to common belief, equity market exposure is not the primary risk for investors. Without exposure to…
Persistence Score Card: Fund Performance vs. Investor Behaviour Even when we are warned, we still don’t act rationally and in our own best interest. The phrase “past performance is no guarantee of future results” is communicated to investment clients as financial advisors are compelled to disclose this from a regulatory perspective. Our collective behaviour evidences…
“Worrying” hijacks your self-care agenda! How you relate to doubt in your inner world can cause chaos in your external world. How many times have you worried about events that never occurred? Very little of what we fear and worry about actually ever happens and hardly ever in the fashion we expected. We worry about…
How will AI impact the future of Financial Advice? The hype is real! Machines with human level intelligence seems to be with us. Artificial Intelligence (AI) solves problems that require the kind of reasoning that we associate with human intelligence. AI learns from past processes and goes beyond normal algorithms which are formulas for processing…
Back to the Future – the benefits of the Pre-Mortem approach You start off with a clear future goal and a plan that will help you to achieve this goal. But the future is uncertain, and we need to have a good understanding of the risks that could cause us to fail at our objectives.…
All the Things We Do Not Know About SVB Barry Ritholz made a couple of sage comments in his article “All the Things We Do Not Know About SVB” that is worth considering: “Armchair quarterbacking the decisions of the Federal Reserve long ago became a blood sport. With the benefit of hindsight, we all are…