Seth Mantell discusses the invisible forces that impact investment decisions.
At a conference held this past weekend at the company’s corporate headquarters in Harumi Island Triton Square Office Tower, Seth Mantell, Chief Investment Officer at Ephraim Global, cautioned an audience of more than 200 financial advisors to take notice of the investment behavioral biases of individuals when designing an optimal investment plan for their clients.
Mr. Mantell told the participants that an increased awareness of ‘unseen dynamics’ can result in improved financial planning results. At the same conference Howard Dempsey, Chief Financial Officer at Ephraim Global, spoke about the factors that drive top performers to achieve superior outcomes and the significance of marginal gains.
Speaking at the event Seth Mantell said: “As individuals we tend to make ourselves believe that we are realists and make prudent, objective choices. However the data tells a different story, our brains are hardwired and susceptible to biases. People tend to fixate their investment decisions on previous available information and after that, regardless of shifting circumstances, don’t adapt enough as time goes forward; this however can lead to excessive contributions in the wrong sort of investments”.
“As an example, owning an asset makes it more valuable to us, regardless of its track record. In the event of an asset underperforming our minds tell us that it should be kept as it will improve. On the other hand, if an asset performs very well our intrinsic mental process leads us to believe that it will continue to perform at the same level. This can be rather detrimental in the case of changing conditions in a volatile economic environment”.
“Financial advisers need to be completely aware of these unseen dynamics. Results are not usually scrutinized in an objective manner. It’s difficult to rewire how we work, but by comprehending where we go wrong we can pinpoint deficiencies and improve investment results”.
Mr. Mantell outlined several behavioral biases at the event which he considers that once completely appreciated can enable investors to have more positive investment experiences and outcomes. He also detailed methods of presenting financial information in a better light to allow clients to make more informed choices.
Founded in 2005, Tokyo-based Ephraim Global is an international asset management group serving clients around the world. The company offers a wide range of financial advisory and planning services, bond and mutual funds, diversified asset portfolios, pension plans and account management for private and institutional clients alike, focusing on diversification, extensive research and a risk-aware investment approach.
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