It is nearly 40 years since Charley Ellis first categorised investment management as a “loser’s game”. Many institutional investors have taken on board that counter-intuitive message – but how many financial advisers have also absorbed the fact that a proposition that explicitly or implicitly promises clients they can pick funds that consistently beat the markets after costs is a near-certain losing proposition in the long run?
The general election has thrown up many interesting issues for investors, but none was so marked as the continuous disparity, up to and including polling day itself, between the outcome in seats implied by the opinion polls and endorsed by many pundits, and the different outcome that was forecast throughout in the odds quoted by bookmakers and on the betting exchanges.
Two years ago I wrote a column in the Financial Times about the life and career of Sir John Templeton, the professional investor and philanthropist who had died a few weeks earlier. In the course of the piece I mentioned in passing a memo that he had written to colleagues at his investment advisory firm in the early 1950s on the subject of How To Keep A Client Happy.
What are the lessons of the Madoff scandal? The more that comes out about this incredible story, the more complex and intriguing it becomes. Harry
Although nobody much believes in the Efficient Markets Hypothesis any more, its lesser known cousin the CMH appears to go from strength to strength. CMH
I have felt for some time that one of the biggest current risks for investors is that they become so bemused by the gloomy news