Category: Money tips Release Date: 2007-06-29
Intersection where traffic is heavy, we often find an interesting phenomenon. When the red light, people are waiting for traffic lights, it tends to glance right and left. It is not observed coming and going of vehicles, but standing around waiting for traffic lights along the pedestrian. If people are to comply with traffic rules around patiently waiting for green light, then people are going through the red light for traffic violations on the possibility of small, but if someone tried to cross a red light, but the number of people crossing the red light enough, then is bound to the surrounding pedestrian traffic violations doubled the courage to inspire more people eager to end a spectacular intersection will occur, traffic flow, sounded an ear-piercing sound of a car horn. Of course, we can also move people around them do not care, then the result or perhaps because of his rash and become red-light running traffic perpetrators, or perhaps because he insisted to do a law-abiding citizens through the red light behind the crowd and become a crossroads The one alternative.
Last year's winner of the Nobel Prize in Economics Thomas Schelling has a similar example to explain how the motivation is the ultimate impact of micro-macro behavior. He eventually led to mass violations of the number of those who first crossed the red light is defined as "critical mass." In a certain "critical mass", the individual's behavior will lead to collective behavior.
A similar situation, in the daily investment fund managers have also occurred frequently. Fund managers observe the daily ups and downs of economic indicators and stock Change at the same time those same observation was also observed around these indicators and stock investors in action. If a sufficient number of investors around the same investment preferences or adopt the same investment strategy, it is likely to change previously established a fund manager's investment strategy, and ultimately affect their investment performance.
Different fund managers have different investment styles and strategies. In my opinion, the investment strategy in itself, and there is no absolute level of good or bad, only if timely difference. Whether stock selection or market timing, whether the focus investment or portfolio investment, whether it is single-mindedness to buy and hold or the grass is always greener in pursuit of hot spots frequently are likely to bring us over a period of gains, while in other a period of time so that we are lagging behind broader market. Variety of fund performance and portfolio changes in a comprehensive analysis has revealed that fund performance depends more on whether the fund managers at the right time to choose the appropriate strategies, rather than the number of esoteric investment strategy contains the unique concept of how clear or has a profound the stigma of such masters such as Warren Buffett. The so-called appropriate strategy for most investors is to be approved and adopted strategies. This is like if you can quickly and safely through the intersection does not depend entirely on whether you are bold enough or whether strict compliance with traffic rules, but rather depends on whether you follow along with the majority of pedestrians crossing the red light, or with the brave old be honest on the ground waiting for the green light.
The vast majority of fund manager's investment strategy has its own preferences, they are willing to be guided by these strategies through practice to verify the effectiveness of their strategy, but the reality is that if they do not adjust their time according to the market strategy is likely to faced with the pressure from the fund holders.
Tolstoy said that happy families are always similar, unfortunate households each have their own misfortune. Successful fund managers around the investors to be good at observing actions, good at grasping the "critical mass" of the same.
Crossroads provides us with the traffic situation on the investment strategy of thinking, and the fund manager's investment strategy has always adhering to a situation in complex crossroads. Observe the people around you, perhaps more than your daily observation index and the stock price is more important.
