Saturday, August 09, 2008
The ability of investors to select funds whose future performance is superior has been termed the smart money effect. The researchers examine the smart money effect on Australian superannuation funds. Specifically, they investigate whether Australian investors make smart choices in selecting funds.
The research fails to uncover any supporting evidence for a smart money effect in the Australian superannuation fund industry, concluding that Australian investors generally are not able to recognise high performing superannuation funds.
Thursday, August 07, 2008
...In a cover letter to Treasury Secretary Henry M. Paulson Jr., the group attributed some of the crisis to human psychology:
“While this turn of events had multiple causes and contributing factors, the root cause of financial market excesses on both the upside and the downside of the cycle is collective human behavior — unbridled optimism on the upside — and fear — bordering on panic — on the downside. As History tells us in unmistakable terms, it is virtually impossible to anticipate when optimism gives rise to fear or fear gives rise to optimism. The last twelve months have been no excetion to this sobering reality.”