Any company can run into difficulty. Most potential good news is already built into the stock price of a blue-chip favourite. Bad news tends to be unexpected and can cause significant damage to the share price.
Investment fads are nothing new. When selecting strategies for their portfolios, investors are often tempted to seek out the latest and greatest investment opportunities.
Making sensible investment decisions is difficult. We are subject to a range of behavioural biases. We have to cope with incessant noise around financial markets. We behave in ways that are inconsistent with our long-term investment objectives. So, what can we do about it?
Depending on luck is simply not a sustainable investment strategy. Evidence-based, goal-based investment may not sound as exciting but is also a lot less work.
Volatility is back. Just as many people were starting to think markets only ever move in one direction, the pendulum has swung back the other way. Anxiety is a completely natural response to these events. Acting on those emotions, though, can end up doing us more harm than good.
According to a global sustainable investment group that covers Australia, New Zealand and other developed nations, assets managed under "responsible investment" strategies increased by 25 per cent between 2014-16 to US$22.89 trillion.