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Story telling for better investments

Philosophers say that the ability to tell and transfer stories is the factor which separates human beings form the animals. When story telling plays a crucial role in our lives it is no wonder if they take an important role in the investments as well. Analysts and strategists spend more time writing and talking about their ideas and recommendations rather than doing the analysis or executing calls. The task of storytelling in the field of investments is to explain, interpret, predict, persuade or guard. Stories about which of the investments will be performing well or which are the ones not performing well, in which direction is the market moving, what is the cheap or expensive share etc. these stories matter especially when the market is so volatile that the stories try to guard investors from making bad decisions. But it may be hard for the investors to determine which the good stories are, which the bad ones are and which actually the fairy tales are. There are stories which prevent irrational behavior, stories which explain the terms , stories that persuade and the ones which never change.

To begin with , a real story which needs to be told by every investment professional to their client.

As it is the adviser’s main task as the investors have tis strong tendency of letting emotions get in between their judgments and investments. Buying of shares at high level and selling it when the price hits low scared by the further reduction of prices, the investments leads to disappointment. Here the story telling plays the role of helping the client to fall into prey of the emotions.

Story telling also helps you weigh down all the possible opportunities and risks involved in making the informed decision. It also supports behavioral aspects too. Investment Is always fun if you know more about the company you are investing it and the story telling might help the clients to acknowledge that they are contributing for a better world when investing in sustainable assets. But it is also important to not to get confused these explaining stories with the worse kind.

“ Always keep thinking for yourself. In this case, I’ve always asked myself: How can undervalued stocks give superb returns if they’re still undervalued? You can guess how factor investing has performed in the last few years. I wouldn’t be surprised if the next storybook heroes will be found in illiquid assets, such as private debt and private equity, offered in a liquid solution. So, don’t believe in fairy tales, because if something seems too good to be true, it usually is,” Says the chief.

As discussed above investing is all about stories and this day its more than ever. If we talk about the advantages of having compelling stories, on the stock-specific level – companies performed very well and offer double-digit returns this year. And good story stocks for this year is nothing but the stories of COVID-19, related to pandemic for example remote work, online shopping and delivery services or renewable-energy stocks related to structural themes such as climate changes. As the pandemic surpasses there might be stock of sad stories taking over but the upper hand will be with the good stories stock itself.

“Investing in equities will give you lower returns than in the past, but these returns are still relatively attractive. To fully take advantage of these returns, storytelling is very important in order to avoid behavioural traps.” Is the best story told by Bob Homan , Chief investment officer, ING.


Euro zone ministers expect inflation to slow in 2022

The acceleration of euro zone inflation, driven energy prices, is mostly temporary. Then the price growth will slow down again. The euro zone finance ministers agreed that, that too the next year as forecasted by the European Central Bank and the European Commission.

Paschal Donohoe, chaired the talks of the ministers in Luxembourg. In a news conference he said that there was also agreement that the inflation spike was not an argument against the transition to renewable sources of energy. This is under the EU’s ambitious plan of reducing CO2 emissions to zero by the year 2050.

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Under new rules, borrowing for investment sensible

British finance minister Rishi Sunak said that the government borrowing to fund investment was a sensible thing. This is to allow under new fiscal rules that he is likely to announce, unlike borrowing for day-to-day spending. He said that borrowing for capital investment that is going to drive up their growth is probably a sensible thing for them. And that too particularly in an environment of slightly lower interest rate. Sunak stated this in an event on the sidelines of the annual conference of Britain’s ruling Conservative Party. This event was organized by the Taxpayers’ Alliance advocacy group. Sunak stated in that event, that borrowing for more day-to-day spending is probably less something that you would want to have as part of your framework.

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IMF board to interview Georgieva-sources

The International Monetary Fund’s executive board is going to interview Managing Director Kristalina Georgieva. This is regarding that; its reviews claims that she pressured World Bank staff to alter data to favor China in her previous role. Board members were initially expected to meet with Georgieva. But spent their time working on other regular business matters.

The board members spent hours for questioning lawyers from the WilmerHale firm. This is about their World Bank investigation report which alleged that Georgieva, as the bank‘s CEO applied undue pressure on staff, to alter data in the flagship “Doing Business” report to benefit China. Then, an IMF spokesperson said that the IMF board remains committed to a thorough, objective, and timely review of the matter. Georgieva has strongly denied the accusations.

The upcoming interviews could prove pivotal in either increasing support for Georgieva. This is with many IMF shareholders are keen to wrap up the board’s deliberations on the matter. The fund’s most influential member governments, including the top shareholder the United States, have withheld public judgment. The World Bank tasked WilmerHale with investigating the “Doing Business” data irregularities identified in 2020. The law firm’s report contends Georgieva. The former World Bank President Jim Yong Kim’s office pressured staff to manipulate data so that the China’s global ranking in the “Doing Business 2018” study of investment climates rose to 78th from 85th.

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