Managing Equity Portfolios: A Behavioral Approach to improving skills and investment processes
- 1st. ed
- New Delhi PHI Learning 2014
- 277
Portfolio management is a tough business. Each day, managers face the challenges of an ever-changing and unforgiving market, where strategies and processes that worked yesterday may not work today, or tomorrow. The usual advice for improving portfolio performance—refining your strategy, staying within your style, doing better research, trading more efficiently—is important, but doesn’t seem to affect outcomes sufficiently.
This book, by an experienced advisor to institutional money managers, goes beyond conventional thinking to offer a new analytic framework that enables investors to improve their performance confidently, deliberately, and simply, by applying the principles of behavioral finance. It offers a conceptually straightforward and well-tested framework that measures key inputs in active portfolio management to management success like skills, process, and behavioral tendencies with evidence of how it helps managers enhance self-awareness and become better investors. In a series of short, accessible chapters, the author investigates a range of topics from psychology and neuroscience, describing their relevance to the challenges of portfolio management. Finally, the book offers seven ideas for improving. These range from maintaining an investment diary to performing rudimentary calculations that quantify basic skills; each idea, or “project,” helps managers gain a deeper understanding of their strengths and shortcomings and how to use this knowledge to improve investment performance.
Introduction Part One: Game Change 1. Industry Challenges 2. Why Johnny Can’t Improve 3. New Analytic Framework 4. Process and Behaviors 5. Feedback in Action 6. Phantastic Risks Part Two: Behavioral Matters 7. What Drives Selling? 8. Sell the Way You Buy—Strategically 9. Bearing Up in a Bear Market 10. Aching Conviction 11. Unconscious Deliberation 12. Investing in Self-Awareness 13. Stressing Performance 14. Thesis, Narrative, or Just Another Disappointing Story 15. Dreaming of Alpha 16. Motivated Reasoning 17. Regrettable Choices 18. Endowing Success 19. Counterfactual Investing 20. Great Investing is Not Natural 21. Inside-Out Investing 22. Beware Phantastic Investments 23. Thanks for the Memories 24. Skills, Process, and Behaviors 25. Processing Success 26. Primed for Success 27. Fear, Anger, and Risk 28. Successful Choices 29. Changing for the Better 30. Portfolio Thinking 31. Promiscuous Thinking 32. Getting in the Flow 33. Believing is Seeing 34. A Storied Portfolio 35. The Trouble with Improving 36. Tired Investing 37. That Winning Feeling 38. Hold That Thought 39. Overcoming Overconfidence 40. The Power of Vulnerability Part Three: Improving Right Away Project 1 Embracing the Scientific Method Project 2 Maintaining a Diary Project 3 Accounting for Skill Project 4 Learning about Buying Skill Project 5 Measuring Your Sell Effectiveness Project 6 Calibrating Sizing Project 7 Checklists Epilogue Glossary