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What the case is about the key decisions, themes and conceptse Why the themes and concepts

s are important in the context of the case How the key themes and concepts work summarize mechanics or math What you dont, what you wonder 1. Describe JP's investment philosophy as it applies to behavioral finance Exams how investor behavior can be affected by biases and emotional reactions and theorizes the inefficies arise in the stock market because investors are consistently irrational in making many investment decisions. JP Morgan aimed to capitalize on these market inefficiencies by targeting stocks with attractive valuations and strong fundamentals. J.P Morgan looked to sell stocks when they stopped exhibiting these characteristics. Behavioral Finance provides an overlay to the Standard Theory. It provides a framework to understand non-rational investor and market behaviours. It includes broad social aspects that are not related to anything fundamental We value losses more than we value gains given an equal probability for both. J.P Morgan manages clients assets through three key business units: Private Bank high net worth individual 0 addressed every facet of wealth management, leveraging all capabilities of the larger firm. What drives performance of the portfolio of high net asset clients is asset alloacation opposed to a single product. Focused on building portfoios Private Client Services(PCS) clients with less than 25 million in assets Interested in protecting and prowing their assets for their immediate family

Asset managemtn, developing financial products for retial and institutitonal investors Over confidence JPM funds systematically overweight value stocks, means that our investment behavior is changed. We are forced to focus on out of fashion stocks that we wouldnt naturally have bothered with and that means that we cannot fall into the same overconfidence trap. Loss Aversion Our approach requires a systematic tilt to momentum, forcing us to run our winners and cut our losers. It also forces our investors to re-evaluate stocks which have done well for a long time but are now starting to disappoint

The behavior of investors The behavior of markets 2. What are over confidence and loss aversion? How are these concepts incorporated into JP's strategy? 3. How do Private Bank and Private Client Services manage wealth? 4. What role does the client portfolio manager play? At the end of the day, is this just another marketing gimmick or is there 'real' investment science behind JP's approach

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