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US version of Investing: The Evidence released

We are pleased to announce the release of a US version of our highly acclaimed documentary, Investing: The Evidence. The film is 45 minutes long and sets out the basic principles of evidence-evidence-based investing. It also explains the importance of investor discipline and the value of using a fiduciary financial adviser. It was originally...

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Higher conviction could exacerbate active managers’ problems

Hardly a day goes by without someone suggesting a cure for the ills of active fund management. Cutting fees seems the obvious solution to me if the industry wants to stem the flow of assets out of actively managed funds. Simply trading less...

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Elroy Dimson on the most important lesson from market history

The problem with getting to the truth about investing is that everyone in the industry has some sort of vested interest. I often find myself wondering how much better informed investors would be if, instead of always seeking the opinions of people with...

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Active managers have biases too

So much is made of the cost advantage of low-cost indexing that there’s a danger of forgetting its behavioural advantage. Behavioural biases and natural human emotions are bad for returns, and as we’ve shown before, it’s harder for active investors to stay the...

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We’ve known for 85 years that forecasters can’t forecast

I’ve noticed a tendency in the financial media to talk about the failure of active funds to outperform the market net of costs as if it’s something we’ve only recently discovered. In fact, for those who were prepared to look for it, the...

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Don’t be tempted to join the stampede

Traditionally, behavioural finance has focused on biases. Every propensity we have as investors to act irrationally has had a label attached to it — optimism, bias, recency bias, confirmation bias, and so on. But some behavioural scientists are starting to question whether the focus...

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Let’s teach children about investing in secondary school

I think we can safely say that if we’re serious about trying to defuse the global pensions time bomb, we need to prioritise investment education. Research by the OECD and other organisations has shown that adults who received financial education in school are more likely to...

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