The year 2020 has been tumultuous in many different aspects of daily life, including in financial markets which sold off precipitously in the spring only to recover even more robustly over the months which followed. One way to help make sense out of the investment world in 2020 is by examining the various market narratives which dominated over the course of the year.
In his 2019 book Narrative Economics, Nobel-prize winning economist Professor Robert Shiller suggested that financial markets (and even the underlying economy) have become dominated by “narratives,” stories which spread quickly and come to govern investor and consumer behavior. This trend has been encouraged by the rise of passive investing, the decline of fundamental analysis, increased algorithmic/computerized trading by hedge funds, and the overarching impact of social media. In this podcast, we examine several of those narratives seen in 2020 and discuss how we as investors ought to take them into account when constructing and managing our portfolios.
- Speaker: Jack Parham – Chief Investment Advisor, Eton Advisors Group
- Host: Greg Dixon – Marketing Consultant, Eton Advisors Group