I wrote my book, What Investors Really Want, because I worry that we have moved from the cardboard image of investors as rational to the cardboard image of investors as irrational and lost the true image of normal investors in the process. Normal investors are investors like you and me, often normal-smart but sometimes normal-stupid. I also worry that we have lost the connection between investments and the life of investors beyond investments. I wanted to understand what normal investors really want. And I wanted to describe normal investors as they really are. Because investors who fail to understand themselves cannot help themselves, and advisors who fail to understand normal investors cannot help them. Continue reading →
Pension funds are large investors. Members of the board of directors of any pension fund all struggle with the same question: what should we do about our investments? They need to be able to make informed decisions about which strategy to take. Yet, this is difficult as many issues aren’t clear. Alfred Slager, CIO of Stork Pension Fund and economist at Tilburg University, explains why he and Kees Koedijk decided to write the book Investment Beliefs and how it offers members of pension fund boards concrete steps to help them get more grip on investments.
You’ve just joined the board of your pension fund, and have been entrusted to join the investment committee meeting. On the agenda for the upcoming meeting is a proposal from the asset manager hired to manage the pension fund’s investments. The investment manager lays out the proposal in nice PowerPoint sheets. This being your first meeting, you decide to play the role of observer, and see the following discussion unfolding, jotting down quotes. At the end of the meeting, you inspect the harvest. Continue reading →
Managing a pension fund, especially today, turns out to be a huge and complicated task. Jean Frijns, Professor of Investment Theory at VU University and chairman of the Frijns-committee, explains the challenges pension fund managers are faced with today, and what they can do to get it right. In short: formulate your investment beliefs and implement them properly.
If you’re trustee of a medium or small sized pension fund (for argument’s sake, below 1 billion euro assets under management), are you in a position to effectively to manage your balance sheet and asset managers, and what tools do you need? That was the main topic of last Thursday’s seminar, organized by pension institute Netspar, together with the Business School of Maastricht University. Kees’ presentation focused on the necessity of developing beliefs, if only to be aware of what asset managers and financial markets can and cannot deliver. This helps improve investment governance while managing the total workload of boards. Continue reading →