Qualitative vs Quantitative: An exact science or a matter of opinion?
Traditionally, fund managers have used a qualitative investment process, drawing predictions from their direct experience investing in markets. This results in inherent bias in their investment style. Outcomes are influenced by the inevitable pitfalls of this subjective investment process rather than a scientific and objective evaluation of data.
The results from qualitative managers can be impressive but the probability of anyone predicting a particular manager’s success, from the hundreds of available qualitative managers, appears to be no better than chance.
Quantitative investing is based on the theory that mathematical relationships exist between economic data such as interest rates, GDP and inflation, along with assets such as stocks, bonds, commodities and property.
Quantitative fund managers identify these relationships using sophisticated mathematical models called algorithms and develop investment strategies that have a higher probability of success. Algorithms are not new technology but what is new is the possibility of taking advantage of their predictive capability within the investment world for the retail investor.
Sensible investment planning is based on understanding your investment aims, as well as your time horizon. When considering an investment strategy, this will take into account your objectives and attitude to risk. Advanced Asset Consultants will help you determine an investment plan appropriate for your needs.
Sunday February 10, 2019
£21.6 billion has been accessed since pension freedom were introduced,in 2018 730,000 individual withdrew £6 billion from their pension holdings.Most of the withdrawals represent small amounts circa £8,000 per individual. However there are clients who have accessed much larger pots by way of Defined Benefit transfers and moving into drawdown to access the flexibility that …
Sunday February 10, 2019
The chances of a client fully understanding the implications of a transfer will vary across the market, most clients who receive an option to transfer focus on one thing and one thing only the “BIG” number on that bit of paper. This can be considerable and may well be an eye-watering number moreover their biggest …
Friday November 02, 2018
“A goal properly set is halfway reached”. Zig Ziglar The key to building wealth Our life is an endless series of daily choices, and how we manage those choices determines the outcome of our life. We all want financial freedom, but how will we achieve it? Financial goal-setting is the key to building wealth. There …
Saturday June 30, 2018
Traditionally when retiring an annuity was purchased providing income throughout life providing longevity protection with over 700,000 pension holders accessing their pots, 17% of which have purchased some form of an annuity, not that surprising I hear you say. However, annuities purchased from existing providers (clients not using open market option) are still hovering around …
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