5  invested in. You have to cluster the investment managers to demand excellence from some of the firms in these portfolios – to care about the long-term. I won’t labour a significant additional challenge too much, but let’s not forget that investment managers are likewise incentivised to behave in a short-term manner too often also.
The outcome of their behaviour leads to the pro-cyclical nature of investing, including institutional ‘herding’ and locking in losses, rather than benefiting from bargain price opportunities. Such institutional (and business confidence) herding destroys wealth, increases financial volatility, and kills long-term strategies.3 As Frankie Howerd, the British comedian, said: ‘there’s nowt so queer as folk’.