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Investments

Spring 2011

Gary Brinson ’68—Investing in the world

As businesses became more international and markets around the world grew increasingly interconnected over the last three decades, a forward-thinking investor could succeed with a global portfolio. Gary Brinson was one of the earliest of those investors.

He recognized in the 1970s that the markets outside the United States were not, as conventional wisdom dictated, excessively risky. In the right balance, he reasoned, they could actually lead to greater diversification and solid returns.

Brinson ’68 received the University’s highest honor last fall, the Regents’ Distinguished Alumnus Award, because of his achievements in institutional investing and his pioneering approach to global markets.

That investment acumen—worth … » More …

Spring 2011

Video: Gary Brinson’s advice for investors in the 2010s

Gary P. Brinson, nationally recognized investment fund manager and 1968 graduate of Washington State University, gives advice to investors and consumers in the 2010s. He describes the downturn in the economy and possible solutions for people who want to save and weather the storm.

Brinson managed a record trillion dollars in investments in the late ’90s, earned the highest honor of the Chartered Financial Analysts Institute (an award given to such notables as Warren Buffett), and is a lifetime member of the Horatio Alger Association. WSU honored Brinson with the Regents’ Distinguished Alumnus Award in fall 2010.

Read more about Brinson in “Investing in … » More …

Spring 2011

Real investments return real experience

Stock symbols and percentages march across a long ticker screen, but it’s not a Wall Street brokerage firm. It’s the fourth floor of Todd Hall at WSU, and the eyes monitoring the stock market belong to undergraduates managing the Cougar Investment Fund.

The students invest $1 million of the university’s endowment—the Cougar Investment Fund—in a large capitalization equity portfolio. Under the supervision of Rick Sias, WSU finance professor and Gary P. Brinson Chair of Investment Management, the class has outperformed the S&P 500 since 2001.

Sias approached the WSU Foundation and suggested the program in 2000. “We wouldn’t charge any fee—unlike most managers. We … » More …

Winter 2002

Same dance, different tune

Buy low, sell high. Investors understand this basic goal of investing. This idea appeals to the intellectual side of our brain. However, it is the emotional, not the intellectual, side of our brain that usually motivates action. That is why advertisements and sales pitches appeal to our feelings more than our intelligence.

 Unfortunately, our emotions and psychological biases make buying low and selling high difficult. Consider the actions of many investors. The great bull market of the late 1990s brought millions of new investors into the stock market. The continual rise of the stock market was a trend that investors projected into the future. Assuming … » More …

Winter 2001

Investment Madness: How Psychology Affects Your Investing and What to Do About It

In Investment Madness: How Psychology Affects Your Investing…and What to Do About It, John R. Nofsinger (’88 Elect. Engr., ’96 Ph.D. Fin.) debunks the accepted wisdom that people make rational investment decisions. They don’t. The book lays out the psychological biases and emotions that often trip up investors, impair their decisions, and consequently jeopardize their wealth.

Unlike other books on finances, this one “focuses on the reader—the investor, rather than on the stock market and investment strategy,” says the Washington State University assistant professor of finance.

While investors blame financial analysts and overhyped stocks for the depressed state of many nest eggs following the recent … » More …

Spring 2002

The other side of the coin

Making financial decisions is difficult to begin with—even more so when we let our emotions get in the way.

“Greed is good,” says Gordon Gekko in the movie Wall Street.

Although I would not go quite that far, greed is a natural human emotion. A Wall Street adage states that two factors move the market: fear and greed. This perception is fueled partly by the media and partly by reporters who wish to be dramatic but may not fully understand what truly drives the market. While ideas of fear and greed have dramatic potential, the characterization is far too simplistic. The human mind is too … » More …