Finance's Wrong Turns: A New Foundation for Financial Markets, Asset Management, and Social Science

Active investment strategies and traditional institutional quantitative technologies have failed to provide superior risk-adjusted, cost-adjusted returns over investment relevant horizons. Economic and financial theory has been in error for more than fifty years, leading to the persistent ineffectiveness of professional asset management. This book introduces Monte Carlo simulation methods, modern statistical tools, and U.S. patented innovations to redefine portfolio optimality and procedures for enhanced professional asset management. It also traces the major historical developments of theory and institutional asset management practice and their limitations over the course of the 20th century to the present.

Format: Hardback
Length: 138 pages
Publication date: 17 December 2022
Publisher: Springer International Publishing AG

The current state of financial theory and professional investment practice is facing a significant crisis, with little to no credible evidence supporting the effectiveness of active investment strategies and traditional institutional quantitative technologies in delivering superior risk-adjusted and cost-adjusted returns over investment relevant horizons. This crisis has been ongoing for over fifty years, and it is the root cause of the persistent ineffectiveness of professional asset management.

Contemporary sociological and economic theory, agent-based modeling, and a deeper understanding of the social context for preference theory offer a rational and intuitive framework for understanding financial markets and economic behavior. The author, who has extensive experience in both practical asset management and quantitative analysis and strategy on Wall Street, shares his insights into the limitations and challenges of traditional quantitative asset management tools.

The book delves into the introduction of Monte Carlo simulation methods, modern statistical tools, and U.S. patented innovations to redefine portfolio optimality and procedures for enhanced professional asset management. It also presents a novel understanding of modern equity markets as a financial intermediary for purchasing power constant time-shift investing, which is highly suitable for meeting investor long-term investment objectives.

The book aims to address the limitations and provide solutions for more useful financial theory and more reliable asset management technology. It traces the major historical developments of theory and institutional asset management practice throughout the 20th century and into the present, including the contributions of Markowitz and the birth of modern portfolio theory.

By exploring these topics, the book offers valuable insights for professionals, researchers, and investors seeking to improve their understanding of financial markets and develop more effective investment strategies. It emphasizes the importance of integrating social and economic factors into financial analysis and the need for innovative approaches to asset management in order to achieve sustainable and competitive returns.

Weight: 412g
Dimension: 235 x 155 (mm)
ISBN-13: 9783031218620
Edition number: 1st ed. 2023