Smarter Decisions in Uncertain Times: Insights from Annie Duke and Morgan Housel

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What do the coronavirus pandemic and the resulting market volatility have to teach us about risk, uncertainty, and investment decision making?

Annie Duke and Morgan Housel explored this question in depth as part of the 73rd CFA Institute Annual Virtual Conference, which yielded a three-step rubric to help investors navigate the tumult.

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Katherine Collins, CFA, Explains How COVID-19 Has Changed ESG Investing

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Is environmental, social, and governance (ESG) investing having a moment in the sun? Asset managers have found that ESG funds outperformed their peers in the first four months of 2020, and many investors are now noticing how ESG considerations can be especially relevant during a crisis.

For Katherine Collins, CFA, the head of sustainable investing at Putnam Investments, ESG metrics have been a fundamental part of every investment decision. As part of the 73rd CFA Institute Annual Virtual Conference, she explained that ESG analysis offers advantages by assessing different types of risk. “It’s increasingly common for different types of investors to focus on a materiality-based framework,” she said.

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Aswath Damodaran Discusses Valuation amid COVID-19

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Aswath Damodaran had some advice for the audience at the 73rd CFA Institute Annual Virtual Conference:

Don’t abandon valuation fundamentals during the COVID-19 crisis.

“It is precisely times like these that matter most,” he said. “You need to go back to the first principles of valuation. Everything I have learned about valuation has been in the context of a crisis.”

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Alejandra Grindal Examines Global Economic Prospects

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The economy of every country in the world has been affected by the COVID-19 pandemic — “No country has been left unscathed,” according to Alejandra Grindal, senior international economist for Ned Davis Research Group. As part of the 73rd CFA Institute Annual Virtual Conference, Grindal provided an assessment of the pandemic-induced global recession and the outlook for global equities.

Grindal predicts that no country is likely to return to pe-COVID levels any time soon, but we may already be seeing signs of who the clear winners and losers of this crisis will be.

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Curt Mercadante Discusses Building a Brand and Influencing Others

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“Great influencers don’t push. Great influencers attract people – first to themselves and then to their ideas.”

— Bob Burg

Everyone has a brand, whether you know it or not, or even whether you like it or not. That’s according to author and branding expert Curt Mercadante, who defines your brand as how you’re influenced and how you influence others. At the 73rd CFA Institute Annual Virtual Conference, he shared some simple and effective ways to build and harness your personal brand. 

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Amy Morin on Enhancing Mental Strength in a Time of Crisis

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Mental strength is important in times of crisis. For the 73rd CFA Institute Annual Virtual Conference, psychotherapist Amy Morin described exercises that can help professionals develop their mental strength and adapt to difficult situations.

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Donald Altman Explains How to Stay Effective with Mindfulness

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Psychotherapist Donald Altman changed his life after studying mindfulness practices in a monastery. He now teaches these practices as a way to relax, destress, and think more clearly. For the 73rd CFA Institute Annual Virtual Conference, Altman discussed the neuroscience behind mindfulness and highlighted its benefits, explaining how mindfulness can be used to stay calm in the face of extreme stress.

Altman noted that many of us are experiencing heightened anxiety in the current environment — our nervous systems crave constancy and regularity, and our brains are wired for face-to-face interaction. To cope with their absence, Altman recommended developing mental clarity and a sense of equanimity. He highlighted mindfulness as a way to quiet down the emotional inner core of our brains.

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Stressed? Daniel Crosby Says Let it RAIN

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Although people may not realize that they are experiencing stress, Daniel Crosby, Chief Behavioral Officer at Brinker Capital, says that recognizing the symptoms is an important first step in coping with extra pressures during the global pandemic. To diagnose and control stress, he recommends the RAIN model — it stands for recognize, allow, investigate, and non-identification.

The first task in this framework, recognizing the symptoms, might be more difficult than it seems. Crosby says that observing patterns around food intake, sleep, and exercise can provide excellent cues. Stress can manifest itself through loss of sleep, lack of appetite, excessive eating, anxiety, or being short tempered. Noticing these symptoms can lead to a constructive diagnosis.

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Vikram Mansharamani: Supply Shifts Could Create 2 Economies

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The world’s economies don’t need the coronavirus to drive them to protectionism and trade wars — they were headed that way on their own. For the 73rd CFA Institute Annual Virtual Conference, economist and author Vikram Mansharamani discussed how global forces have already been changing the flow of international trade and what that means for the future.

According to Mansharamani, four global transitions have been at work:

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This Time, It’s Physically Different

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Is the recession induced by COVID-19 anything like previous recessions? Campbell R. Harvey, Duke University Professor of Finance, finds that it is similar to past crises, but it has some very important differences. As part of the 73rd CFA Institute Annual Virtual Conference, he discussed what the recovery will look like, whether it will take as long as previous ones, and what the potential risks are.

Harvey highlighted the predictive relationship between an inverted yield curve and a recession, suggesting that while this recession had been previously predicted, it is unlike others because it has a biological cause — not a financial or economic one. This should mean important differences in the outcome and timing of the recovery.

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