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People invest in people,

not numbers

Despite this fact, the scientific analysis of behavioral factors related to investment performance is almost universally ignored. 

Investment performance cannot be predicted from past investment returns, however, it is possible to predict future human behavior from past human behavior.

 

We see this fact as an overlooked opportunity, and a unique competitive edge of our investment approach.

!

The Highmore team has spent years refining and developing proprietary behavioral analytics to be used in our investment selection, risk management, and client profiling processes -

all outgrowths of the doctoral research of one of our co-founders at Oxford.

The Theory Behind The Practice

Investments Continue To Be Selected Based On A False Premise

Prediction and selection of future investment returns based upon past investment performance is misguided. Nevertheless, most investments continue to be chosen based upon backward looking data which has little or no predictive relationship to future performance.

 

Highmore defines this as the Quantitative Attribution Fallacy - basically meaning that investors choose investments based on false selection criteria.

The Quantitative Attribution Fallacy 

Historical

Returns

Attribution

Historical

Statistical 

Analysis

Historical

Performance

Returns

Backward Looking 

Data

Backward

Looking

Analysis

+

+

Non -

Predictive

Attribution

=

Sound

Investment

Decisions

Non - Predictive

Nature of

Performance

An over-reliance on past performance in investment selection can reduce the probability of investment success

If Performance Is Not A Good Predictor Of Investment Performance, Then What Is?

Highmore believes that most investments are, in fact, investments in people, and that the missing factor in investment selection is also the most obvious one - human behavior. This is an important revelation as very few investors consider the most predictive factor of all, that of human behavior, in any scientific manner when selecting investments. 

Highmore created analytical tools where none existed in order to identify the link between human behavior and investment performance.

Investor DNA

Highmore Investor DNA is a proprietary analytical tool which assesses aptitude and investment specific behaviors which our research has indicated can have a link to investment performance. 

 

Highmore utilizes the Investor DNA assessment as part of a proprietary investment diligence process applied to every investment.    

Investor Personality

Highmore Investor Personality is a proprietary analytical tool which assesses clients so that investment portfolios are better targeted to how investors think about investments. 

 

Highmore utilizes the Investor Personality assessment as part of a proprietary client profiling and risk management approach.