Making smart and informed choices when investing money involves understanding how our natural biases can sometimes affect our decision-making in saving and investing. In today’s rapidly evolving world of finance and investment, understanding the impact of our biases and emotions on our decision-making processes is more crucial than ever. It is against this background that the Capricorn Group and its subsidiary Capricorn Asset Management hosted an Inspire event on Wednesday, 4 October at Avani Windhoek Hotel where investment experts shared some insights on how to tackle bias when it comes to investment decisions.
Held under the theme, ‘Exploring biases in investment decisions’, the session was headlined by Capricorn Asset Management’s Chief Investment Officer, Relf Lumley; senior associate at Stonehage Fleming and board member of CFA Society South Africa, JD van Wyk and; and Institutional Manager at Capricorn Asset Management, Elina Shikomba.
The discussion provided a thorough analysis of how behavioural finance plays a role in affecting market outcomes.“Behavioural finance helps us understand how financial decisions around things like investments, payments, risk, and personal debt, are greatly influenced by human emotion, biases, and cognitive limitations of the mind in processing and responding to information,” said Relf.
The investment experts further explained how behaviour concepts such as mental accounting, self-attribution, herd behaviour, and emotional gap affect irrational investment choices. The Inspire session concluded with a talk from JD on highlighting the career options available in the investment industry and the various employment opportunities a CFA qualification can provide.
“Capricorn Group’s Inspired sessions have a successful track record of presenting thought-provoking topics presented by experts in various fields. As Connectors of Positive Change we are committed to add value to all our stakeholders through sessions like this in partnership with our subsidiary Capricorn Asset Management.”
“I found the discussion points very relevant today, given that a lot of decisions that we make are impulse-driven or media-driven, so looking at how to review your own financial behaviour and habits is the first starting point in your financial journey. And you can then go to budgeting, looking at your risk profile and then engage financial advisors,” said one of the attendees, Edward Dunaiski.
Relf Lumley is Chief Investment Officer at CAM Managing all Funds at Capricorn Asset Management along with the portfolio management team at a value of almost N$40 billion. He has 12 years of industry experience and is a CFA Charter Holder. He holds a master’s degree in Private Equity, Mergers and Acquisitions. He is a Registered Person on the JSE (Bonds & Equity), an approved portfolio manager at NAMFISA. JD van Wyk is a Senior Associate at Stonehage Fleming. He is a part of the investment research and strategy team, responsible for manager selection and oversight of the firm’s model portfolios. At just over ten years, JD has been in the investment industry for a relatively short period of time – having worked in Corporate Finance and as a lecturer before. He became a CFA® charterholder in 2016. JD is the Chair of University Outreach and Board member of CFA Society South Africa. Elina Shikomba is an Institutional Consultant at CAM with 4 Years Industry Experience. Elina holds a B.Com (Hons) in Financial Economics and investment management from the University of the Free State and is a CFA Level 2 Candidate.
This was the 15th edition of the Capricorn Group’s Inspire session. The sessions are thought-provoking thought leadership information events geared towards inspiring our employees, stakeholders and the public by stirring up conversations with mind-shifting potential. Capricorn Group has, over the years, become synonymous with these Inspire events, featuring well-known thought leaders in the past.