L&GI's Reeve: Psychological bias against HY is ripe for exploiting

Man's psychological bias against lower yielding companies is creating an anomaly which savvy investors can exploit, explains L&GI's Martin Reeves.

It is fairly certain that interest rates will rise in both the UK and US during 2015. That said, the timing of such a move remains uncertain, as there are so many variables - including economic growth and employment levels in different countries, and how these interact. Add to this the wild cards of ISIS and Ebola and, while the direction of interest rates seems clear, the speed of travel is less so. Psychological bias All areas of investment management would benefit from an understanding of behavioural finance. It is really just a case of understanding the psychology of investment...