Michael Ervolini, chief executive of Cabot Research, a behavioural finance adviser to investors, says that an increasing number of investment managers are beginning to analyse their buying and selling behaviour to increase returns. According to Ervolini, most managers could capture more than 100 basis points more in alpha by better understanding their behavioural tendencies.
“Over the last 10 years, risk models and portfolio optimizers have been adopted to squeeze more and more performance out of strategies.
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