A Framework to Drive "Forgetful" Behavior

Business Insider reports on a recent study by Fidelity Investments to find out what, if anything, set apart the highest performing accounts among their $4.6 trillion in managed assets.

According to Riskalyze advisory board member Barry Ritholtz, and his guest James O'Shaughnessy, what they found was fascinating and a bit hilarious: the highest performing accounts at Fidelity were those who forgot they had Fidelity accounts.

The phenomenon of human behavior working against investment performance is well documented: humans generally like to add to their investments when the price is high, and fear drives them to sell or yank their assets after the price drops “too much” for their risk tolerance.

That’s why Riskalyze is designed to help advisors invest their clients within the bounds of their risk tolerance. By reducing downside risk to an amount the client has agreed to withstand in a normal down market, the risk of premature selling drops dramatically, and the enhanced credibility the advisor earns can help to calm the client during abnormal markets.

It may be unlikely that you can get any of your clients to forget about their investments. But Riskalyze gives you a framework to get the same behavior from all of them — enabling you to deliver higher levels of actual performance than they’ve ever seen before.