Setting the Context: Just like investors analyse different asset classes to allocate their investments, another style of investing is observing the exposure of the investment portfolio to different factors. Factors are the drivers of return across different asset classes. For example, consider growth of GDP, it’s pretty intuitive that when an economy is performing well, […]
Category: Finance
SETTING THE CONTEXT So, in the previous two posts in the “Behavioural Finance Series” I had provided a brief introduction on the topic of Behavioural Finance, its distinction from the Traditional Finance Perspective and covered an overview of different types of Emotional Biases. If you’ve not already gone over those articles here’s the link, Part […]
This week’s post is going to explore a topic I’ve perpetually been fascinated about – “Behavioural Finance”, specifically the various biases we might fall victim to! INTRODUCTION To provide you some context, Traditional Finance [TF] assumes that investors are “rational” decision makers and have access to perfect information equally. It characterises investors as risk averse […]
What is Factor Investing? Introduction Factor Investing is an approach wherein the investor focuses on identifying the key drivers that push the different asset-class returns (like stocks or bonds). These drivers could be macro-economic drivers or fundamental drivers. Following Factor Investing would allow an investor to dig deeper into the exposures (think risks) for each […]
Who knew markets could throw tantrums too? That’s exactly what happened in the year 2013 – when the market collectively reacted to the possibility of the Fed stopping it’s large-scale bond purchase program. Concept: What was the”Bond-purchasing” program about? The Fed started purchasing large amounts of treasury bonds and other financial assets, in order to […]
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Behavioural Models
Setting the Context: In a previous post, I had gone over the basics of different types of theories underlying Portfolio Management. Now, since these theories stem from the Traditional Finance perspective, I felt it was apropos to introduce a couple of theories which come under the realm of Behavioural Finance. Right, so let’s jump into […]
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Introduction to Fixed Income
Guest Post by Vrushank Setty What is a Fixed Income (FI) instrument? A fixed-income instrument is an investment tool where the investors get a stable or a measurable form of return for their investments. We are using the term “measurable” because the return payments are known well in advance. These returns are in the form […]
Coffee Time Finance 