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07 February 2013
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  Top Stories 
  • Boeing reportedly works on temporary battery fix for Dreamliner
    Boeing is preparing battery design changes to get its grounded 787 Dreamliner back in the air, while it also works on a permanent solution to the battery problems, industry and government officials briefed on the matter said. U.S. and Japanese aviation authorities would have to approve Boeing's interim modifications to the way the 787s use lithium-ion batteries. The Wall Street Journal (06 Feb.) LinkedInFacebookTwitterEmail this Story
 Morningstar Direct Whitepaper in CFA Institute Selected Content Newsletter
We are very pleased to have been included on this "recommended reading" list. The paper discusses ways to quantify the results from portfolio-level decisions like asset allocations, manager selections, timing decisions, and more. Click here to read our whitepaper.

  Reader Survey 
  • Has implementation of behavioral finance precepts into your investment practice meaningfully improved your results?
    No, we have not implemented behavioral finance precepts  48.33%
    Yes, we have implemented with success  43.57%
    No, we have implemented without success  8.10%
  • Poll analysis: Earlier this week, readers were asked whether implementing behavioral finance principles in their investment practice has meaningfully improved results. Among the three possible answers given, 48.25% of 420 respondents indicated that they have not implemented behavioral finance at their investment firms. Although this may seem surprising, a consistent criticism of behavioral finance is its lack of a unifying theory. In other words, although behavioral finance observations of cognitive biases are descriptive, they do not necessarily suggest how to take advantage of these biases or how to avoid them. That said, a majority of respondents (51.75%) stated that they have incorporated behavioral finance tenets at their investment firms. Among this group, 44% reported success in implementation, whereas 7.75% stated that they have not achieved success. Perhaps recent works by Greg B. Davies and Arnaud de Servigny ("Behavioral Investment Management") and Daniel Kahneman ("Thinking, Fast and Slow") will not only increase implementation of behavioral finance but also improve results. Also, CFA Institute is hosting a forum, Behavioral Finance: From Theory to Practice, that may aid interested practitioners. -- Jason A. Voss, CFA, Content Director, CFA Institute LinkedInFacebookTwitterEmail this Story
  Market Activity 
  • Asian-Pacific markets fall as Chinese holiday approaches
    Most Asian-Pacific markets fell Thursday ahead of next week's Lunar New Year holiday in China. Japan's Nikkei 225 dropped 0.9%. Hong Kong's Hang Seng Index edged down 0.3%. China's Shanghai Composite gave up 0.7%. South Korea's Kospi slid 0.2%. India's Sensex was down 0.3% at midafternoon. Bucking the trend, Taiwan's Taiex rose 0.2%. Australia's S&P/ASX 200 gained 0.3%. MarketWatch (07 Feb.), The Economic Times (India) (12 Feb.) LinkedInFacebookTwitterEmail this Story
  • Analysis: India's hot stock market could be good for the country
    The frothy prices on India's high-flying stock market will benefit the nation if they bring much-needed capital to banks, power generation utilities, steel makers, telecoms, property and infrastructure firms that need to bolster their equity, as well as the government when it sells shares in state-owned enterprises, according to The Economist. "Taking all these needs into account, India could quite happily gobble up $50 billion-100 billion of equity capital," the magazine notes. The Economist (tiered subscription model) (02 Feb.) LinkedInFacebookTwitterEmail this Story
  • Retirement plans seen making more use of target-date strategies
    Defined-contribution retirement plans likely will increase use of target-date investment strategies, encouraged by features including auto enrollment, re-enrollment and default investment options, industry experts said. During the 12-month period that ended Sept. 30, investment in target-date strategies by defined contribution plans rose nearly 29%, according to Pensions & Investments' annual survey of the biggest retirement plans. Pensions & Investments (free registration) (04 Feb.) LinkedInFacebookTwitterEmail this Story
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  • OECD calls on BoE to buy more debt if economy stays weak
    The Organization for Economic Cooperation and Development is encouraging the Bank of England to purchase more bonds if the economy remains weak. "The U.K. has its own currency, its own central bank and its own monetary policy," OECD Secretary General Angel Gurria said. "Therefore, it has the capacity to go, if you will, the extra mile." Reuters (06 Feb.) LinkedInFacebookTwitterEmail this Story
Behavioral Finance: From Theory to Practice
7-10 April 2013
University of Virginia Darden School of Business
Charlottesville, Virginia, United States

Presented by CFA Institute / University of Virginia Darden

Register by 15 February 2013 and receive a US$200 discount.
  • U.S. revamp of credit rating agencies stalls
    Four years have passed since top-rated mortgage-backed securities started going bad, jeopardizing the U.S. financial system, and the government's effort to reform credit rating agencies has bogged down. The longer the government waits to overhaul the credit rating system, the closer the nation comes to repeating the 2008 crisis, experts say. The Washington Post (06 Feb.) LinkedInFacebookTwitterEmail this Story
  • Germany pushes ahead with ring fence
    Germany is forging ahead with plans to separate investment and retail banking. "The precarious situation of single banks shouldn't be able to threaten the stability of the financial system," German Finance Minister Wolfgang Schaeuble said. The Wall Street Journal (06 Feb.) LinkedInFacebookTwitterEmail this Story
  • FINRA chief says "kill switches" aren't ready yet
    Financial Industry Regulatory Authority CEO Richard Ketchum says better risk controls are still needed in automated trading. "I would hope that we are in a much better position on that issue in the next six months," he said. He expects companies to institute "kill switches" that can automatically stop trading if something goes wrong. Reuters (06 Feb.) LinkedInFacebookTwitterEmail this Story
  Financial Products 
  • HSBC's money-laundering settlement took a toll, CEO says
    HSBC Holdings CEO Stuart Gulliver says he felt "absolutely no pleasure whatsoever" in settling with the U.S. Justice Department regarding money-laundering allegations in Mexico. "We've crushed our reputation with the Mexican events," he said. The settlement involved a $1.92 billion payment, and an independent regulator must monitor anti-money-laundering compliance at HSBC. Bloomberg (06 Feb.) LinkedInFacebookTwitterEmail this Story
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