Vanguard: Low-cost index fund investing

Vanguard explores in this paper the rationale for using a low-cost investment strategy.

Source: Low-cost index fund investing

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Vanguard: Why passive is winning

Why passive is winning

Aberdeen Asset Management: The Nuances of Risk and Investing

Source: aberdeen_lens_on_risk_wp_seg_april_2016_0816

Active Management: A Perspective from Orbis Investment Management

Active Management: A Practitioner’s Perspective  by Orbis Investment Management

Source: Orbis Active-Management-A-Practitioners-Perspective May 2016

 

Investing through the decades

Source: Investing_Through_the_Decades

Vanguard: The subtle difference between desired and required returns

Required return = return required following planning and analysis. Portfolio return required to meet financial objectives and goals, a quantitative process.

Desired return =  influenced by external factors, media reports, friends, neighbours, latest performance reports. Not determined by potential future needs.

Often desired returns are much higher than required return to meet goals, putting oneself through unnecessary market risk and stress.

Other times, like during periods of market turmoil, investors tend to be too conservative, mostly cash positions, but difficult to reach required returns over time.

Required return focus investors on asset allocation strategies, tend to be more conservative and less volatile than potentially higher return portfolios. Importantly, lower volatility portfolios help investors to stay the course. Too volatile, investors will jump the boat from time to time.

Source: Required_or_Desired_returns

 

Aspects of Behavioral Finance

Source: Behavioural Finance_Biases