Mind Games

10 Pages Posted: 17 May 2013

See all articles by Patrick Beaudan

Patrick Beaudan

Northern Trust Corporation; Emotomy

Date Written: March 1, 2011

Abstract

The quotes, news and trading tools made available to investors by stock exchanges and brokerage firms are focused on visualizing short-term performance to “help” individual investors trade easily. However, trading and making money from investments do not necessarily go hand in hand. This paper illustrates how trading based solely on short-term historical performance, the only possible approach for most individual investors who do not have access to better analysis, can result in severe losses or missing out on significant gains, while investing with adequate risk-return expectations is more likely to lead to investment success.

Keywords: risk analysis, manager due diligence, multi-manager portfolio construction, performance analysis

JEL Classification: G11

Suggested Citation

Beaudan, Patrick, Mind Games (March 1, 2011). Available at SSRN: https://ssrn.com/abstract=2266124 or http://dx.doi.org/10.2139/ssrn.2266124

Patrick Beaudan (Contact Author)

Northern Trust Corporation ( email )

50 South LaSalle Street
Chicago, IL 60603
United States
415 839 5239 (Phone)

Emotomy ( email )

580 California Street
San Francisco, CA 94104
United States

HOME PAGE: http://www.emotomy.com

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