David Wolf, BSW’s Chief Investment Officer, recently participated in an exclusive, two day investment forum at Harvard University. The invitation-only event brought together 35 advisors from leading independent firms with faculty from Harvard University’s Graduate School of Business and Economics Department. Sponsored by iShares/BlackRock, the forum’s curriculum included presentations and discussions of academic research on macro-economic trends, portfolio construction, behavioral finance, and professional development.
Participating Harvard faculty included:
–Kenneth Rogoff, professor of economics, former economist for both the US Federal Reserve and the International Monetary Fund, and co-author of “This Time Is Different: Eight Centuries of Financial Folly”
–David Laibson, professor of economics, who has published ground-breaking research on behavioral finance and financial decision-making.
–Luis Viceira, professor of business, whose research focuses on long-term asset allocation strategies and risk modeling.
–Francis Frei, professor of management, whose research on service excellence negates much of the “conventional wisdom” on organizational success.
During the forum, David was quite fortunate to have dinner with Professor Rogoff, whose very readable book, This Time is Different, examined more than 800 years of financial history (including myriad debt crises, bubbles, credit crunches, etc.) for 66 countries — and was the subject of this recent New York Times article. Rogoff’s insights are in high demand these days and his counsel is often sought by government officials worldwide. “Ken and I had an engaging conversation about the pickle that Japan is facing: high debt, deflation, demographics; and whether that may be an analog for the US’s current predicament,” said David. See an excellent interview with Rogoff here.
Another distinct highlight for David was his lunch conversation with Professor Laibson regarding his research on financial indecision. “I first learned about Professor Laibson’s research while watching a TED lecture by Harvard pscychology professor Barry Schwartz about his excellent book, The Paradox of Choice. I was very keen to meet him and he did not disappoint.” Laibson’s research, in essence, demonstrated that as investment options increase (example: a retirement plan increases the number of funds available from 5 to 15), individual investor participation actually decreases. Investors become “paralyzed by too much choice.” Fearing making a bad decision, they make no decision – even when that means forsaking significant and guaranteed monetary reward, such as employer matching contributions! See an excellent interview with Laibson here.