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The role of Perception, Intuition and Reason in current financial markets: is algo-trading a blessing or not?

Six months ago we wrote about the work of Nobel Prize winner Daniel Kahneman. One of his important lessons about risks was that the experience of loss is so much stronger than any benefit of profits.
It is thus surprising that many investors went on holiday without much bother over their investment portfolios while a market correction was/is looming.
Kahneman’s “ Maps of Bounded Rationality” describes the happy marriage of Perception, Intuition and Reasoning.
If algo-trading adds to the Reasoning component of behavior, one can question whether the impact of the enormous growth of electronic trades on particularly the US Exchanges was positive in terms of reducing volatility and improving liquidity or not.
When facing a market-correction this seems a relevant point to question.
Our assessment is positive. At the same time some focus on Dark Pools (trades outside official markets) may be long overdue.

Andreas Capital is hiring

For our office in Larochette we are looking for a professional with a background and certainly interest in asset management and financial markets. You will be joining a team of 4 asset managers and 5 trust professionals and have the opportunity to work in a highly specialised environment. You will assist in the daily operational processes of the asset management department; mail handling, reconciliation and booking of transactions, assisting our asset managers in all related matters. If proven successful, trade execution and servicing clients are possible next steps. 

 

Our team offers great flexibility and you might have to opportunity tailoring the working hours, as we would consider a 24-40 hour working week. 

Further details can be found on LinkedIn via the attached link or you are always welcome to contact Bas Schreuders, Jos Rotteveel or Marcel Kleinrouweler