Curated reads for February 08, 2020
‘We need to get angry, and transform that anger into action’ – Greta Thunberg If you recognize the name above, you would get a hint about the direction this article in going in. Globally, investors are reckoning that climate change is real and recognizing that it is an investment risk. And while the wheels of bureaucracy may be slow to turn, we are seeing financial institutions take up the torch when it comes to sustainability. One example is the rise of ESG funds on which we have shared articles in the past. Let’s read a letter to CEOs from Larry Fink, Chairman and CEO of Blackrock, the world’s largest asset manager. Read more
‘In preparing for battle, I have always found that plans are useless, but planning is indispensable’ – Dwight D. Eisenhower While financial planning is hardly comparable to war, the wisdom holds true. You would have noticed that all financial plans come with standard disclaimers about market risk and past performance being not indicative of future returns. Similarly, investing is a means to an end, albeit a unique adventure as each one’s experience will be different. We invite you to read on the importance and fragility of financial planning. Read more
‘We are prone to overestimate how much we understand about the world and to underestimate the role of chance in events. Overconfidence is fed by the illusory certainty of hindsight.’ – Daniel Kahneman Overconfidence is perhaps the most prevalent and potentially catastrophic problem in decision making. In the investing arena, an overconfident investor is likely to take riskier bets and lesser than optimal decisions for portfolio health. Let’s read through the article as it outlines a few steps to balance out the decision making process in investing. Read more
Conventionally, risk in investing is treated as a calculation and can be equated to a number. And to the extent possible, you diversify to mitigate this risk. However this author states that intangibles like emotion and behaviour affect our investment decisions significantly. Let’s explore this some more. Read more
DID YOU KNOW?
DYK: The Eiffel Tower was mocked, ridiculed and almost sold twice. Except that both sale attempts were a scam. Let’s find out more. Read more