Four demons

Kevin Kneafsey ()
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Kevin Kneafsey: Barclays Global Investors, Postal: San Francisco, http://www.barclaysglobal.com/

Journal of Financial Transformation, 2009, vol. 26, 18-23

Abstract: The essence of investing is to generate return and manage risk. In the absence of arbitrage opportunities, return generation is about gaining exposure to risks that are well rewarded. To manage this exposure, we can diversify rewarded risks and hedge risks that are not rewarded. However, our ability to efficiently manage exposure is compromised by how we perceive the investment problem. This paper highlights four pitfalls in how we build portfolios and discusses how they can be remedied.

Keywords: Investment management; risk management (search for similar items in EconPapers)
JEL-codes: G11 G21 G32 (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:ris:jofitr:1392

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