The story is behavioral finance funds. Loved this quote by Chris Davis of Morningstar: “It would be really kind of ironic if you invested in a fund based on behavioral finance and you sold it after the fund had a big loss or added to it after it was up 50 percent.†(…) “It’s hard not to be human,â€. Plus, one could argue that offering “behavioral finance” funds “per se” is playing to the latest buzzwords – which also sounds all too human…
This was just a quick snipe at human nature, but as your loyal servants, we also provide a few interesting links. As usual, beware “studies”, “experts” and “stats” – maintain a critical stance for each and every word you read.
Links:
An useful overview of psychological and behavioral finance, filled with links to other sources;
A September 2009 article on “Lazy funds” outperforming behavioral finance funds – Fox News;
A 2006 study on behavioral finance funds’ performance: summary and full text (just click on “Download” in this page and choose a mirror).
Tags: behavioralfinance, foodforthought, mentalmodels, portfoliomanagement
