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The Case for Long-Termism

11 Pages Posted: 17 Sep 2014 Last revised: 26 Sep 2014

Keith Ambachtsheer

University of Toronto - Joseph L. Rotman School of Management

Date Written: September 17, 2014

Abstract

In their 2014 article in Harvard Business Review, Dominic Barton and Mark Wiseman write that “big investors have an obligation to end the plague of short-termism.” This article supports their assertion by showing that, logically, real investing (as opposed to trading) is inherently wealth creating and long-term in nature. However, powerful short-term forces stand in the way of this kind of investing. The article provides evidence that when these short-term forces are neutralized, executing long-term investment strategies that generate positive multi-decade excess returns becomes a realistic possibility.

Keywords: Abductive Reasoning, Agency Theory, Asymmetric Information, Behavioral Finance, Fiduciary Duties, Investment Beliefs, Long-Term Investing, Pension Fund

Suggested Citation

Ambachtsheer, Keith, The Case for Long-Termism (September 17, 2014). Rotman International Journal of Pension Management, Vol. 7, No. 2, 2014. Available at SSRN: https://ssrn.com/abstract=2497508 or http://dx.doi.org/10.2139/ssrn.2497508

Keith Ambachtsheer (Contact Author)

University of Toronto - Joseph L. Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

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