IN BRIEF
- Investors are increasingly short term in their orientation, even while demographic trends point to longer life expectancy and the need for larger pools of retirement funds.
- Various reasons have been posited for this short-term view; they include the role of incentives, media and financial reporting and numerous decision-making biases identified by behavioral researchers.
- An arbitrage opportunity exists for managers with a longer investment horizon: There are more opportunities for differentiated performance when one holds securities for longer time periods.
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