State of the Art of Investing: Issue 22
13 Trends Significantly Impacting the Investment Profession (and current links to relevant information on them)
Benjamin Graham once said that the true investment professional would "develop a more professional attitude towards his work and a keener interest in maintaining and advancing the standards of his calling." Those standards continue to advance, as most investment professionals can attest.
To keep the CFA program current and relevant, CFA Institute continuously interviews investment management practitioners, employers and regulators through its practice analysis. The 2017 practice analysis identified 13 trends likely to have a significant impact on the investment profession over the next three years. As I advance my own knowledge of these trends I will try to share links to interesting resources in posts like this one. Opinions expressed are mine, not those of CFA Institute. Whether you find them useful or can suggest improvement, please let me know (both so I can learn more and so I can make these posts more useful to others.)
The impact of regulation on investment decision making
- Regulators walk a fine line between involvement and market distortion
- CFTC may classify ICO tokens as commodities
The role of "big data" in financial analysis
- A curated list of AI and machine learning resources
The effects of the low/negative interest rate environment
- The Fed is going to take its time raising rates.
- Will geopolitical risks be the catalyst for higher rates?
- You have to be creative to earn a decent yield these days
The effects of pension funding shortfalls
- The megatrend that will define the next 40 years
The use of robo-advisors in private wealth management
Increased global demand for alternative investments
- Hedge fund managers seem skilled at picking small cap biotech stocks
- Don't let a questionnaire replace actual due diligence
- The state of the private credit industry
- Hyper-illiquidity and infrastructure investment benchmarks
Risk factor asset allocation approaches
The need for investment managers with fintech skills
The need for investment managers with soft skills
"Smart Beta" strategies
Greater demand for active investment management
- There is more to good governance than low costs
- Successful active management requires talent, low costs, and patience.
The role of ESG factors in investing
- Materiality matters: ESG investors should serve only one master
- Unique governance challenges when analyzing listed family-owned firms
- The Americas lag the rest of the world on ESG integration
- Most managers have no specific training for integrating ESG into decisions
The importance of understanding financial market history
Anything else I should be reading?
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