Avoiding the Sirens’ Song

Financial advisers and investors alike may well be able to draw a parallel between Sirens’ enchanting voices and the fads, bubbles and shifting expectations of financial markets. Like Homer in the Odyssey, who tied himself to his ship to stay on course, investors will be well advised to ignore the “Sirens’ song” that comes from social-media, press, co-workers and many other forms as relates financial markets, which may well distract investors from their natural course and lead them to financial “shipwreck”. One potential way to ‘stay the course’ is via Fundamental Indexation strategies, which take a different approach to market capitalisation based strategies. Market capitalisation indices link the current price of a share with its weight and therefore its importance in the index. Such an approach is based on a premise that markets are perfectly efficient, and that prices will always reflect true valuations. Fundamental Indexing instead constructs an index based on fundamental measures of a company’s size sales, cashflow, dividends and book value hence, reducing the effect of market speculation. To read the full article, click the link: (VIEW LINK)

Ilan Israelstam
Co-Founder, Head of Strategy & Marketing

Ilan was a founding team member of BetaShares and is responsible for corporate & product strategy. Previously, Ilan worked for The Boston Consulting Group (BCG), one of the leading global strategy consulting firms.

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