Tag: behavioural finance

Despite great strides being made towards shaping a more diverse and equitable future for the world of investment, many women still underestimate their abilities. A growing body of research, however, suggests that women’s natural traits may in fact put them at a significant advantage compared to their male counterparts.

The renowned behavioural finance research duo, Barber and Odean, published a paper in 2001 entitled Boys will be boys that ruffled a few feathers. The duo studied and reported on the performance difference males versus females generated on their investments. Not only did they find a statistically significant difference in favour of women, but they also found that men had better investment performance in the mere presence of women.

Although past performance is not a good indication of future returns, it seems to remain one of the main determinants of investment switching behaviour and consequently the dreaded ‘behaviour tax’. This behaviour tax is calculated as the performance sacrificed after switching between one unit trust and another.

In the wake of the widespread adoption of revolutionary artificial intelligence (AI) tools like ChatGPT, the realm of AI has rapidly advanced and filtered through to various industries. From healthcare to marketing, AI’s impact is undeniable.

The COVID-19 pandemic shocked the world and left many scrounging for hand sanitiser and toilet paper as shopping aisles stood empty. Similar havoc was wreaked on financial markets as investors abandoned their long-term goals for the immediate emotional comfort on offer by moving either out of financial markets completely or into comparatively ‘safer’ assets.

Legacy and cloud-native tech can complement each other for a more productive business and happier customers. For financial services firms and insurers, the customer relationship is built on trust earned over many years. In turn, these businesses have to be able to trust their foundational IT systems to deliver the requisite uptime, performance, and security.

The last quarter of 2018 can be described as the worst period that investors have experienced since the global meltdown of the financial markets in 2008/9. When these moments of market correction occur, astute investors sit tight while others panic and make irrational decisions.