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noviembre 04, 2022

Overcoming Behavioral Biases: The Importance of Our Proprietary Portfolio Exercises

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noviembre 04, 2022

Overcoming Behavioral Biases: The Importance of Our Proprietary Portfolio Exercises


Insight Article

Overcoming Behavioral Biases: The Importance of Our Proprietary Portfolio Exercises

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noviembre 04, 2022

 
 

All humans have behavioral biases, those blind spots that can impact decision-making. As investment managers, we must recognize that individually, and as an investment team, we are likely to have biases about stocks we own and the process for picking those stocks. Understanding that we have biases is the first step, but what can we do to proactively overcome them? Within Eaton Vance Equity, we believe that having deep company-specific knowledge, training in financial statement analysis, and decades of collective experience are necessary, but insufficient, to achieve strong investment results. Since 2014, we have integrated the discipline of conducting Portfolio Exercises into our investment process, a differentiator in the way we manage money and an important element to our success.

 
 

 

RISK CONSIDERATIONS
There is no assurance that a portfolio will achieve its investment objective. Portfolios are subject to market risk, which is the possibility that the market values of securities owned by the fund will decline and that the value of fund shares may therefore be less than what you paid for them. Market values can change daily due to economic and other events (e.g. natural disasters, health crises, terrorism, conflicts and social unrest) that affect markets, countries, companies or governments. It is difficult to predict the timing, duration, and potential adverse effects (e.g. portfolio liquidity) of events. Accordingly, you can lose money investing in this portfolio. Please be aware that this portfolio may be subject to certain additional risks. In general, equities securities’ values also fluctuate in response to activities specific to a company. Stocks of small-and medium-capitalization companies entail special risks, such as limited product lines, markets and financial resources, and greater market volatility than securities of larger, more established companies. Illiquid securities may be more difficult to sell and value than publicly traded securities (liquidity risk). Non-diversified portfolios often invest in a more limited number of issuers. As such, changes in the financial condition or market value of a single issuer may cause greater volatility. Derivative instruments may disproportionately increase losses and have a significant impact on performance. They also may be subject to counterparty, liquidity, valuation, correlation and market risks.

 
eddie.perkin
Chief Investment Officer,
Eaton Vance Equity
 
 
Aaron Dunn
Aaron Dunn
Co-Head of Value Equity

 

Brad Galko
Christopher Dyer
Head of Global Equity
 
 
ARTÍCULOS RELACIONADOS
 
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IMPORTANT INFORMATION

The views and opinions are those of the authors as of the date of publication and are subject to change at any time due to market or economic conditions and may not necessarily come to pass. The views expressed do not reflect the opinions of all investment personnel at Morgan Stanley Investment Management (MSIM) and its subsidiaries and affiliates (collectively the Firm”), and may not be reflected in all the strategies and products that the Firm offers.

This material is for the benefit of persons whom the Firm reasonably believes it is permitted to communicate to and should not be forwarded to any other person without the consent of the Firm. It is not addressed to any other person and may not be used by them for any purpose whatsoever. It expresses no views as to the suitability of the investments described herein to the individual circumstances of any recipient or otherwise. It is the responsibility of every person reading this material to fully observe the laws of any relevant country, including obtaining any governmental or other consent which may be required or observing any other formality which needs to be observed in that country.

This material is a general communication, which is not impartial, is for informational and educational purposes only, not a recommendation to purchase or sell specific securities, or to adopt any particular investment strategy. Information does not address financial objectives, situation or specific needs of individual investors.

Any charts and graphs provided are for illustrative purposes only. Any performance quoted represents past performance. Past performance does not guarantee future results. All investments involve risks, including the possible loss of principal.

Prior to making any investment decision, investors should carefully review the strategy’s / product’s relevant offering document. For the complete content and important disclosures, refer to the link above.

 

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