Scientia Potentia Est, "Knowledge is Power", is what Sir Francis Bacon claimed in the early 17th century. A timeless lesson that survived to our days, now more than ever critical to understand our world and to invest with clarity. Yet, although one may rush to associate “power” with “profit”, institutional investors know this adage hints to a more pragmatic and valuable consequence of possessing knowledge: prudence.
In this sense, if surely prudence emerges from sensible risk management, it is primarily the result of a correct representation of the expected payoffs and risks portfolios are exposed to. We know this can be achieved by analyzing data, yet to take action something more is needed. In this paper, we discuss how this gap is being bridged by Portfolio Diagnostics, a game changer for asset and wealth managers to scale and improve their decision-making by converting portfolio intelligence into actionable investment insights.
Finance movies often feature crowded trading floors and genius-like managers yelling at flashing monitors, depicting an image – sometimes the myth – that investing is like fighting in a battlefield.