The lens of investing: who can guide investors in a
“post-truth” world?

Present-day abundance of financial information has created a complex world for investors. Some of the facts and data might not be based on truth. While the markets have always had to deal with misinformation, the growing use of technology has allowed for an exponential diffusion of contentious stories.

By Stéphane Monier, Chief Investment Officer, Lombard Odier Private Bank
Monday 27 March 2017

As a result, our societies now have to cope with a reality in which certain facts are interpreted to serve the interests of select parties. This socio-political climate is called “post-truth”. Against this backdrop, investors need a trusted source of information to weather different market climates and to avoid succumbing to the siren calls of fake news and false statements.

As every investor knows, if something sounds too good to be true then it almost certainly is. Investors should rely on tried-and-tested advice providers to make judgements about where to put their money. Even more so in today’s world, where information grows exponentially. When crises emerge and news becomes pervasive during times of economic and political upheaval, making judicious investment choices can feel like a daunting enterprise. Investors can easily get lost in the maze of information complexity.

The proliferation of media channels and websites offering financial information has created a virtually limitless number of sources for investment advice and opportunities. Almost anyone can claim to possess valuable insights. Moreover, in this ‘post-truth’ age of ‘alternative facts’, false information and statements can easily snowball. Our world is full of doubtful data.

It’s commonly debated that some websites and news sources publish sensational headlines and fake news to attract visitors and boost advertising revenues—so-called ‘clickbait’. Although Mark Zuckerberg recently said that Facebook will strive to reduce fake news, perpetrators can set up fresh sites as quickly as old ones are closed down. Meanwhile, the algorithms that drive social media are able to create echo chambers feeding users what they like, based on their previous searches. This could confirm their biases and reinforce their ideas, rather than challenge them.

Faced with these challenges, it can be difficult for investors to know who to trust, where to find the solutions that are right for them, and how to spot the danger areas. More than ever, they need professional financial advisers that have the investment expertise to give knowledgeable advice which can help cut through the confusion.

So how can investors find reliable investment advisers? Longevity is an important factor. Long-standing financial industry actors have been able to weather many economic, political, and social storms in the past.We believe that building wealth requires an ecosystem that generates sound and long-term oriented investment strategies. Now that we’re facing the tests of the “post-truth” world, our experience and our expertise can help investors find the right lens through which they can analyse their investment decisions.

Successful investing is a skill. It requires discipline and composure in times of market stress. Investors can reach this level of comfort with the guidance of an investment specialist who knows how to spot appropriate investment opportunities for clients. This is especially true today. At Lombard Odier, we’ve stayed resilient over the course of great economic upheaval. History has taught us well. We protected and grew our clients’ wealth through the post-Napoleonic depression, 19th century financial tremors in the US, the Great Depression, both World Wars, the dot com bubble of the early 2000s, and the subprime crisis of 2008, by smartly integrating the social and economic dynamics of the past and the present. Our commitment to rethinking, reinforced by robust controls, has produced investment advisers that evolve with our industry and the world around us. These are the strengths that will continue to support us while we’re helping investors work through the “post-truth” age.

The internet, with its ability to disseminate vast quantities of information at speed, does provide huge opportunities for investors. But seizing them requires the ability to sift the spurious from the sound, and react fast. The sheer scale of this task makes it difficult for individuals to perform.

Investment strategies must be carefully crafted. This is why transforming market insights into a solid portfolio performance and a first-class client experience is both a science and an art.

As the fourth industrial revolution dawns on all of us, investors must be vigilant. The pace of change will likely intensify in today’s globally interconnected markets, potentially creating an even less stable environment for uninformed investors. It is imperative that they keep a watchful eye on where our economies and societies are headed and on the use of disruptive technology that’s transforming our world. This is why it makes sense to turn to experienced professionals who closely monitor economic, political, societal and technological trends, and who use a holistic approach to wealth management that steadies clients in this realm of complexity.

Expert guidance and full transparency in client relationships are key to investment success and genuine value creation. At Lombard Odier, we believe that our proprietary investment intelligence, our innovative technology and our caretakers’ approach to wealth management will continue to protect and build fortunes. And we believe that these are the assets that help us embody the bank that our clients need today, and tomorrow.

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