EDHEC has made available an interesting survey of current European investment practices
, comparing actual practice with recent state of the art in the investment literature. It's a feature of such a survey that practice cannot really look all that good since there will invariably be a time lag between conceptual groundworks and practical implementation. But it transpires from the results that practice does not seem to look to finance literature for competitive advantage by implementing the latest innovations, such as how to handle tail risk.
This conservative approach is probably due to a behavioural bias in the investment community to avoid the risk of being wrong and alone,
and it is not likely to change anytime soon, what with the bad press that financial innovation has these days. But in true contrarian spirit, I'd like to point you to this insightful�praise of financial innovation
Consult the survey and compare it with your firm's practice for your own private game of truth or dare ...
Labels: investing, surveys