But some ETFs didn't
behave the way investors expected.
Not exact matches
There's no real basis to say
investors will
behave the same
way in the U.S., Bogle argues.
Enter Markowitz, who showed in his research that by building a portfolio of investments that are not perfectly positively correlated (a fancy
way of saying they
behave differently from one another), an
investor could actually lower portfolio variability without sacrificing expected return.
Investing in a portfolio of assets that
behave in different
ways can help to reduce the risk
investors face.
Given the
way the markets have
behaved in the last couple of years, more buy and hold
investors are shifting their investment strategy to incorporate some trading in their plans.
By measuring the risk - adjusted alpha that managers generate and not just their return relative to the benchmark,
investors can change the
way managers
behave.
They found that
investors behave the
way psychologists predicted, not the
way economists predicted.
(You can quote Shiller from now until kingdom come, but I daresay that he'd never claim that the future is known in the stock markets, or that if we could only somehow to convince all
investors to
behave a certain
way that stocks would somehow provide smooth and steady returns year after year.)
You can quote Shiller from now until kingdom come, but I daresay that he'd never claim that the future is known in the stock markets, or that if we could only somehow to convince all
investors to
behave a certain
way that stocks would somehow provide smooth and steady returns year after year.)
BB: Study great
investors and try to understand why they
behaved the
way they did.
Although this is a very simple model, it also happens to be the
way that many
investors behave.
Only when current resources are sufficiently good should the
investor behave in a risk - averse
way, favoring relatively sure bets over riskier ones.