Investment Beliefs

Abstract

Increased transparency and a difficult environment for returns increase the importance of well-thought out investment policies for investors, clients, and trustees; a coherent set of investment beliefs provide the basis for a good investment policy. Investment beliefs improve stakeholder governance by reducing possible conflicts of interest, and affect the innovative adaptability of an organization by setting guidelines for best practice. A survey of published investment beliefs reveals three essential elements for investment beliefs: 1) a clear view of the capital markets (the inefficiencies to exploit, the risk/return relation, the relation between asset pricing and investment horizon); 2) a competent organization (cost-effectiveness, organization-specific values); and 3) a view on societal issues that affect investments (sustainable investments, corporate governance).

TOPICS: In wealth management, portfolio theory