ADVICE CORNER


In the past four years family offi ces have been consistently over-optimistic about their future investment performance when contributing to The Global Family Offi ce Report. Is behavioural fi nance the answer to more effective forecasts or should they put more effort into predicting other indicators? Nicholas Moody reports


F


orecasting the future is a poisoned chalice. Just ask Michael Fish. In 1987 the then BBC weatherman infamously


assured the British public there was no hurricane approaching southern England “but it would be very windy in Spain”. That weather event became known


as the Great Storm of 1987—the most destructive since 1703—which left 18 people dead and caused damage that when


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converted into a 2017 equivalent totalled £5 billion ($6.6 billion). Fish continued to serve as a forecaster at


the UK Met Office until 2004 however, the term “Michael Fish moment” entered in to British popular culture and has been applied to public forecasts, on any topic, which turn out to be embarrassingly wrong. While the consequences of investment


forecasting doesn’t result in danger to life and limb, collectively family offices


ISSUE 72 SUPPLEMENT | 2017


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