finance discussion writing

Discussion 4: Should I Invest With Money Managers or Not?

For this discussion, you will examine your personal beliefs in how money should be invested.

Individual, institutional, and retail investors invest for many different reasons. However, their

main goal is to invest for future financial gain. As you consider your future financial management profession, what might be the challenges you face when encouraging future investors to invest with you? What might be the benefits of delegated money management? Would the money managers exhibit the same biases as “regular” investors? Why or why not? If money managers are unbiased, why wouldn’t everyone invest indirectly? What are the potential costs associated with delegated money management?

Review the course material for the week and specifically focus on how behavioral biases have

the ability to move market prices and, therefore, may change your belief in how money should be

invested.

Discussion 5: The Human Element to Biases in the Market

Do non-economic factors affect market prices? If so, are they likely to be economically meaningful? Researchers suggest that psychology-based trading strategies afford financial managers the opportunity to exploit and develop profitable outcomes (Addoum & Kumar, 2013). In previous weeks, you explored how behaviors might provide further insight into key anomalies found in market efficiency as well as how they might impact stock market puzzles. As a financial manager, it will be important for you to develop your skills in psychology-based trading strategies of which understanding the human element to biases will be first and foremost.

For this discussion, you will examine whether human mistakes ultimately influence financial

markets. You also will examine the elimination of the human element to determine if biases no

longer occur in financial decision-making. Review the course material and specifically focus on how the human element may influence financial markets.

Discussion 7: Looking Forward . . .

As you look forward to your future as a financial manager in a corporate setting or working with

a money management firm, you will continuously reflect on your beliefs and constantly seek new opportunities for growth and development.

For this discussion, you will reflect on your personal beliefs as you look forward to your future

work in financial management. Please organize your discussion around the following questions:

• Reflect and explain whether you believe biased investors will survive. If so, how will they

survive? If not, why?

• Reflect and explain whether you believe mispricing and correction pattern will disappear. If

so, how? If not, why?

• Reflect and explain whether you believe CEOs will make optimal corporate decisions. If so,

how? If not, why?

• Reflect and explain whether you believe analyst forecasts will become more accurate. If so,

how? If not, why?

• Reflect and explain whether you believe markets will become more efficient. If so, how? If

not, why?