Guest Opinion: Know Your Customer? Are You Sure?

Guest Opinion: Know Your Customer? Are You Sure?

I love movies about great mathematicians, real or fictional. The Imitation Game and Good Will Hunting are great ones, but A Beautiful Mind is my favorite. This movie profiles John Nash, who became a pioneer in game theory and won a Nobel Prize along the way. Because of this, I paid quite a bit of attention to game theory in grad school and constantly looked for applications. Over time I became disappointed, as the models I experimented with didn’t work as well in the real world as in the “games.”

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Guest Opinion: Why Robo-Analysts, Not Robo-Advisors, Will Transform Investing

Guest Opinion: Why Robo-Analysts, Not Robo-Advisors, Will Transform Investing

Robo-advisors and robo-analysts are both important to enabling wealth management firms to cut costs without sacrificing quality of advice, but the importance of a robo-analyst to enhance the quality of investment advice shouldn’t be underestimated. Today, many of the tasks performed by robo-advisors are low value-added services such as determining and communicating asset allocation strategies (e.g., 60% equities, 30% fixed income and 10% cash).

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Guest Opinion: The Coming Resurgence of Active Management

Guest Opinion: The Coming Resurgence of Active Management

Active management has long been the foundation of a well-functioning stock market.  Many of the brightest minds on Wall Street have dedicated their careers to separating the good ideas from the bad, doing deep research to allocate capital to the right themes, sectors and companies.  The by-product for the rest of us has generally been an exceptionally healthy stock market with relatively efficient asset prices.

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Guest Opinion: Burning Down Markowitz’s House

Guest Opinion: Burning Down Markowitz’s House

“Watch out, you might get what you’re after” was an anthem sung by a frantic David Byrne in the Talking Heads classic, Burning Down the House.  When the song was released in the mid-1980s, Wall Street was also in a frantic mode of its own. In the ensuing decade, it began providing its clients with more technology to better access markets and more products to replicate the strategies being employed by institutional investors.

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