Simplifying investment decisions (1)

Simplifying investment decisions (1)
News from BusinessDay:


Many investors find themselves with an investment portfolio that is too complicated to understand, hard to manage and difficult to change. The fact that an investment strategy involves complicated processes does not guarantee commensurate returns on investment. Investors should therefore strive for simplicity in portfolio construction to ensure the achievement of maximum returns with minimum means. Failure to keep an investment strategy simple can expose an investor to costly mistakes.

In this edition of GTBAM education series, we will highlight investing principles that will simplify the maze that new investors often go through in their quest to make intelligent investment decisions.

Many factors can influence an investor to own a complicated investment portfolio, these include a tendency to buy into investment vehicles without regard to the impact on the overall portfolio investment strategy; lack of basic understanding of diversification, buying complex investment products and buying investments without a disciplined investment strategy.

Factors that can contribute to a portfolio’s complexity are further enumerated below:

continues on BusinessDay

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US Sustainable Investments Rise to Record $ 3.7T: US SIF
News from Bloomberg:

When companies pollute the environment, support corrupt governments, or allow executives to make drastic decisions with little oversight, they put their business at risk. That’s why institutional investors are now employing sustainable investing strategies in more than $ 3.7 trillion of investments — a 22 percent increase in two years, a study found. 

Hospitals, retirees, pensions, banks and religious institutions used sustainable and responsible investing (SRI) strategies for $ 1 out of every $ 9 invested in the U.S. at the end of 2011, according to the report, released yesterday by US SIF, a Washington-based nonprofit that tracks SRI investing on behalf of member investors. Total investments guided by such strategies increased six-fold since 1995. 

Clients are raising their guard against hidden risks across environmental, social and corporate governance criteria (ESG), according to Lisa Woll, US SIF’s chief executive officer. It’s no longer a niche investment strategy. “SRI is happening across asset classes, and that’s been a big change,” Woll said on a conference call.

Environmental factors were most cited by money managers. Climate change is taken into consideration by 23 percent of institutional asset owners who use ESG criteria.   Institutional investor assets guided by environmental concerns increased 43 percent from 2010,…………… continues on Bloomberg

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