[经管营销]Six Sigma and Financial Planning.ppt

Six Sigma and Financial Planning John Stancin Financial Advisor Disclaimer Overview My Background- engineering and financial planning Juran Quality- Kepner Tregoe- Kaizen- Deming- Six Sigma Common challenges investors and advisors face Overview of Balanced Portfolio Design Brief overview of the GE Six Sigma Process Application of Six Sigma in the Financial Services Industry Typical applications Practical application for financial planning Questions A Brief Review of the Markets Stocks, Bonds, Bills, and Inflation Reality: Markets Are Secular Another View of the 102-Year Chart Where do you think we’re headed? Case for Active Asset Allocation Potential Drawbacks to a Lack of Process in Investment Management Behavioral Issues Chasing Returns– “CNBC disease” Uncooperative market Emotional Investing- buying high and selling low Concentrated holdings- risk disproportionate Buying individual securities without diversification or asset allocation strategy Trying to time the market… Investors Ruled by Emotion Behavioral Finance Quiz- taken from Journal of Investment Consulting Vol 7, No 2, 2005 article 90% confidence interval : lower and upper boundaries Martin Luther King’s age at death length of the Nile river in miles number of countries in OPEC number of books in the Old Testament Diameter of the moon in miles weight of an empty Boeing 747 in pounds year in which Wolfgang Amadeus Mozart was born gestation period of an Asian elephant (in days) air distance from London to Tokyo in miles deepest known point in the ocean in feet Answers 39 years 4187 miles 13 countries 39 books 2160 miles 390,000 pounds 1756 645 days 5959 miles 36,198 feet Another Quick Behavior Quiz Case 1: you are given two choices A. $4000 prize 80% chance of winning B. $3000 given to you directly Which do you choose? 80% choose option B even though expected value of “A” is higher at $3200 Another Quick Behavior Quiz Case 1: you are given two choices A. $4000 loss 80% chance of paying B. $3000 paid