WHEN most people think of folklore, they think of ancient stories passed down through the ages. The tales may be instructive, amusing or both, but few take them as entirely true. Still, they represent an oral tradition that once helped people make sense of the world.
After a nearly two-year study that aimed to answer the question, What does true investment success look like?, Suzanne Duncan, global head of research at State Street's Center for Applied Research, and her team found that the way individual and professional investors made investment decisions was so skewed that achieving both high returns and long-term objectives was nearly impossible.
They came up with a label for the beliefs that...
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