{"title":"Practical Applications of Thriving Amid the Ravages of Creative Destruction in the Investment Management Industry","authors":"Donald J. Peters","doi":"10.3905/pa.2023.pa532","DOIUrl":"https://doi.org/10.3905/pa.2023.pa532","url":null,"abstract":"In <ext-link><bold><italic>Thriving Amid the Ravages of Creative Destruction in the Investment Management Industry</italic></bold></ext-link>, from the June 2022 30th anniversary special issue of <bold><italic>The Journal of Investing</italic></bold>, author <bold>Donald Peters</bold> (of <bold>T. Rowe Price</bold>) shares insights from his 35-year career in the field. He emphasizes the competitive value of embracing non-mainstream approaches, such as working with a longer time horizon while most investment managers are focused on the short term. Other examples include reading academic investment literature (to keep up with the latest thinking), reading proxy statements (to learn about CEOs’ financial stake in their companies), focusing on <italic>after-tax</italic> returns, and dissuading retail investors from engaging in speculation. Peters asserts that investment management is a highly rewarding career that is all about adding value and helping clients reach their financial goals. Initial success comes to those who are intelligent, adapt to changing markets, and work well with a team. They must have intellectual curiosity, a passion for investing, and outside friends and interests that give them different perspectives. They must think like detectives when analyzing stocks, while being savvy enough to sort out facts from sometimes biased company communications. Managers also can help their communities and themselves by joining the boards of nonprofits, where they gain valuable knowledge about institutional investing and consulting.","PeriodicalId":500434,"journal":{"name":"Practical applications of institutional investor journals","volume":"3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135436146","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Practical Applications of Harvesting Multi-Asset Carry, Value, and Momentum: Work Smarter, Not Harder","authors":"Brian Jacobsen, Matthias Scheiber","doi":"10.3905/pa.2023.pa531","DOIUrl":"https://doi.org/10.3905/pa.2023.pa531","url":null,"abstract":"In <ext-link><bold><italic>Harvesting Multi-Asset Carry, Value, and Momentum: Work Smarter, Not Harder</italic></bold></ext-link>, from the Spring 2022 issue of <bold><italic>The Journal of Financial Data Science</italic></bold>, authors <bold>Brian Jacobsen</bold> and <bold>Matthias Scheiber</bold> (both of <bold>Allspring Global Investments</bold>) investigate the effectiveness of different systematic investing strategies. The traditional approach treats carry, value, and momentum as trading signals that dictate when to establish a position. The study finds that these signals strengthen or decay, depending on how long the investor waits to make the initial trade or holds the assets thereafter. Investment returns vary widely and are marginally negative, on average. The study then tests out a different approach that uses carry, value, and momentum not as triggers for trades but as explanatory variables in a machine learning–based decision-tree model that determines which assets are sending the strongest signals. This approach produces marginally positive returns when it compares each asset’s signals to the median of its asset class, and it produces significantly positive returns when it compares each asset’s signals to the median for all asset classes. Returns improve even more when the investor frequently monitors trades and signals and closes out positions when signals decay.","PeriodicalId":500434,"journal":{"name":"Practical applications of institutional investor journals","volume":"120 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136117321","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}