Читать книгу Behavioral Portfolio Management - C. Thomas Howard - Страница 27

Principle III will likely be the most difficult to assimilate. It involves redirecting the powerful emotion of loss aversion, while acting contrary to the hardwired tendencies of thinking short-term and social validation. For a number of investors, this may be too much to ask. But for others, progress may be possible. A first step is calling things as they are. Rather than labelling everything risk, be careful to identify and separate that portion which is really emotion. There are risks that must be taken into account when making investment decisions but don’t muddy the water by carelessly lumping emotions and investment risk together into a single number, as is the case for many popular risk measures.

A flying analogy may help think about the separation process. All of us who fly have experienced turbulence, which can range from being unnerving to downright frightening. When asked about their flight, many travelers will comment on the amount of turbulence they encountered. However, we know from years of FAA (Federal Aviation Administration) research that turbulence rarely causes injury or death. Instead, pilot error (over 50%) and other human error are the leading causes of plane crashes.

What if the FAA had instead listened to passengers to determine the risk of flying? Rather than meticulously studying each accident and uncovering the true cause, the FAA would have spent considerable time trying to reduce turbulence, as requested by passengers, thus missing the critical role of human error in accidents. By focusing on short-term turbulence, they would have actually made flying more dangerous. Luckily they did not and as a result 2012 was the safest year in commercial flight since the dawn of the jet age.

We are not so fortunate in the investment industry. Rather than carefully separating risk from emotions, the industry provides a mixed bag of risk measures that exacerbate the emotional aspects of investing. As I argued earlier, this means many long-horizon portfolios are built to reduce short-term volatility, while at the same time increasing portfolio risk.

So to make the transition, it is necessary to allay the fears of clients while at the same time disregarding many a conventional wisdom. Unlike those who have a fear of flying and only have themselves to change, the investment professional has to confront both clients and the investment establishment. Sadly, the risk measures put forward by the industry are more emotional measures than they are investment risk measures.