Do expect “false dawns”
Don’t lose sight of your investment objectives
Don’t fall prey to investor biases
- The endowment bias means you overvalue what you own simply because you own it, regardless of its objective market value.
- With the status quo bias, you fear the “pain” that moving away from the status quo might inflict if it’s the wrong decision.
- Regret aversion is about trying to avoid feeling regret at all costs when we consider the regret we might derive from future actions. Regret increases when we are directly responsible for our decisions and leaves us slow to realise losses.
- With the anchoring and adjustment bias, an investor relies too heavily on the initial information and fails to adequately adjust their return expectations based on current or new information.
This is an article originally written by the Investment Communications team at Schroders.
This material has been issued by Schroder Investment Management Australia Limited (ABN 22 000 443 274, AFSL 226473) (Schroders) for information purposes only. It is intended solely for professional investors and financial advisers and is not suitable for distribution to retail clients. The views and opinions contained herein are those of the authors as at the date of publication and are subject to change due to market and other conditions. Such views and opinions may not necessarily represent those expressed or reflected in other Schroders communications, strategies or funds. The information contained is general information only and does not take into account your objectives, financial situation or needs. Schroders does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this material. Except insofar as liability under any statute cannot be excluded, Schroders and its directors, employees, consultants or any company in the Schroders Group do not accept any liability (whether arising in contract, in tort or negligence or otherwise) for any error or omission in this material or for any resulting loss or damage (whether direct, indirect, consequential or otherwise) suffered by the recipient of this material or any other person. This material is not intended to provide, and should not be relied on for, accounting, legal or tax advice. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. You should note that past performance is not a reliable indicator of future performance. Schroders may record and monitor telephone calls for security, training and compliance purposes.
Schroders believes in the potential to gain a competitive advantage from in-house global research; that rigorous research will translate into superior investment performance. We believe that internal analysis of investment securities and markets is paramount when identifying attractive investment opportunities. Proprietary research provides a key foundation of our investment process and our world-wide network of analysts is one of the most comprehensive research resources dedicated to funds management.
Areas of expertise:
• Australia equities
• Fixed income
• Global equities
With a global network of researchers, we focus on serving our clients and targeting one result - superior investment performance.
Inherent in our approach to investment management is:
• A structured, disciplined and repeatable investment process
• A clearly defined investment style
• A team approach to investment management
A global asset manager
• We have responsibility for A$803.1 billion of assets* on behalf of institutional and retail investors, from around the world. Their assets are invested across equities, fixed income and alternatives.
• We employ over 4700 people worldwide who operate from 41 offices in 30 different countries across Europe, the Americas, Asia and the Middle East.
• We are close to the markets in which we invest and our clients.
• Schroders has developed under stable ownership for over 200 years. Long-term thinking governs our approach to investing, building client relationships and growing our business.
*Source: All data as at 30 June 2018