How to Design Optimal Investment Processes

How to Design Optimal Investment Processes

Markus Schuller

As much as we might think excellent at multitasking, as a species we’re just not built for it. And it’s not much different for those in investment management. Join Markus Schuller as he explores how to form optimal investment processes to help your team achieve the most evidence-based decisions possible.

Competent

As much as we might think excellent at multitasking, as a species we’re just not built for it. And it’s not much different for those in investment management. Join Markus Schuller as he explores how to form optimal investment processes to help your team achieve the most evidence-based decisions possible.

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How to Design Optimal Investment Processes

11 mins 6 secs

Overview

We are all constantly at risk of getting overwhelmed by uncertainty, due to our ambiguity and complexity intolerances. We face this issue in our work and personal lives - and it is no different for those in investment management. Recent research in applied behavioural finance concludes that the choice architecture of an investment process is of great significance when it comes to whether the decision is made rationally or emotionally. Making a good investment decision requires maximising the most evidence-based risk-reward asymmetry at the decision point. Best practices to achieve this asymmetry suggest a design made for decision-making under uncertainty. There are 5 useful design principles to remember for investment processes: investment hypothesis, implicit debiasing, seamless operational integration, ensuring purpose and supervising quality routines.

Key learning objectives:

  • Define choice architecture

  • Understand how to align individuals, teams and processes

  • Identify 5 principles for investment processes

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Summary
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Join now to watch

This content is also available as part of a premium, accredited video course. Sign up for a 14-day trial to watch for free.