Category: Money tips Release Date: 2007-07-31
Dumbbell-ended investment to overcome the weaknesses of human nature - to vote on a visit to Morgan Alpha Fund Manager Jun Lu
"Some of the inherent weaknesses of human nature will lead to investment in the presence of non-rational behavior, thus affecting the final return on investment, even if the experienced fund managers are no exception," the cast Morgan Alpha Equity Fund Manager Jun Lu in an interview with reporters so said. In his view, Europe and the United States market through the empirical test of the more successful dumbbell-ended investment technology, investment is expected to make up for shortcomings of traditional as far as possible to overcome the weaknesses of human nature. At present, the Morgan fund investment experience to learn from foreign shareholders to invest in technology that are being issued by the China Construction Bank to vote Morgan Alpha Fund is China's first investment in innovation and adoption of the advanced technology stock funds.
Human vulnerability affects the return on investment
Lu Jun said the investment field facing one problem is that traditional financial gap in the investment field has been continuously revealed, the actual financial markets often deviate from the value of a rational track and running, even in investment theory and technology continue to improve, but because of human nature on some of the weaknesses in the investment there was a series of non-rational behavior. Such as the disposition effect, herd behavior, excessive self-confidence, blind greed and so on. Even if we choose the best stocks, often at a profit without a timely end to a loss of stop-loss Shiyou not timely. In addition, the fund managers in pursuit of better performance, usually adopt a "buy growth stocks when the bull," "short, when transferred into the value of stocks" strategy. However, as the economy cycles shortened, the increasing speed of changes in the market, long-short more and more difficult to determine at this time simply to invest in growth stocks or value stocks tend to be caused by operational tempo of step with the market cycle, have suffered losses.
Jun Lu believes that in the current market environment, these weaknesses of human nature to make the traditional investment faces significant challenges. How do I get rid of the shortcomings of traditional investments to overcome the weaknesses of human nature to become urgent to resolve the current market proposition.
Dumbbell-type technology to remove defects in the traditional investment
According to reports, dumbbell-style investment in technology is the application of a bright spot in dynamic econometric models in order to avoid investment risks caused by human weakness. The so-called dynamic econometric models through proactive intelligence management, to actively create excess returns. And dumbbell-style investment techniques, that is, the layout of the match making investment, stressed at both ends of investments, realization of value stocks and growth stock mutual balance. Fund managers will stock the library stocks selected according to their growth and value to carry out a style of ranking, and then combines the layout of the economic cycle and industry factors such as selection of individual stocks further build the core of the stock library. The portfolio will be specific to the market economy cycle, a reasonable balance between portfolio value and the proportion of growth stocks. Both value and growth stocks, you can better control the combined market adaptability, to a certain extent, to avoid the boom cycle for human misjudgment, in the long-short two market environment could persist in pursuing a higher excess returns.
In particular, Lu Jun said that investment managers can build one with a dumbbell-type stocks and bonds portfolio, so that the combination of both growth and stability of the advantages of a substantial rise in the stock market, the portfolio can win big The profit margins; while underperforming in the stock market, the bond market tend to be more positive performance, investors are also available at this time is more stable return on investment. Even in the complete investment in the stock market, dumbbell-style investment in technology is also useful here. For example, investment managers can build one with value stocks and growth stocks of the dumbbell-type combination. Is generally believed that, in the bull market, growth stocks performed better, while in the bear market in value stocks tend to become defensive star. However, in practice, the market wheeled very fast, long-short changes difficult to judge, this time simply to invest in growth stocks or value stocks tend to be caused by operational tempo of step with the market cycle, have suffered losses. The dumbbell-type composition of the above deficiencies can be avoided through reasonable with value stocks and growth stocks ratio, while the strict selection of individual stocks, the investment manager can be done either in a bull market or bear market, have access to a more satisfactory investment income, in the long term, the portfolio return on investment is considerable.
According to reports, from a global point of view, dumbbell-type investment is already a very mature investment technology, a number of well-known international asset management companies such as JP Morgan Fleming Asset Management Group, HSBC and so on, have the use of dumbbell-type investment technology. Morgan Fleming, for example, its global equity fund of this type are created in excess of the good performance of the market average.
