Media contributions
1Media contributions
Title Discovery at UQ 2012 Report Degree of recognition National Media name/outlet UQ Discovery Media type Print Country/Territory Australia Date 1/12/12 Description Investing money in the stock market is not something many people associate
with safety and certainty in recent years, but UQ Business School PhD student
Rand Low hopes his research will change that outlook.
“When you get on a plane, you feel
safe and secure because the aircraft
has been designed to get you to your
destination regardless of whether it is
sunny or stormy,” Mr Low says.
“Investors should have that same feeling
of safety when they invest their money,
whether it is a bear market or a bull
market.
“My research is about designing and
testing new portfolio management
strategies that can generate a better risk
adjusted return, regardless of market
conditions.”
Investing money in the stock market is not something many people associate
with safety and certainty in recent years, but UQ Business School PhD student
Rand Low hopes his research will change that outlook.
Mr Low, who has presented
internationally at institutions in Great
Britain and the United States, says
stock markets have an asymmetrical
dependence structure that largely
nullifies strategies designed to protect
investors from steep losses.
“Asymmetrical dependence can be
explained by the news that we hear on
television or read in the newspapers
where stocks drop excessively during
bad times, but don’t rise in the same
way during good times.
“Last year we heard about the market
losing $26 billion in a single day, but we
never hear of the opposite happening.
“Asymmetrical dependence reduces the
effectiveness of portfolio diversification,
which is what we have been told
protects us from the volatility of the
market, but as we know, it doesn’t
always do that.”
Mr Low, who is a qualified Chartered
Professional Engineer (CPEng) and
worked for a multi-national technology
firm for several years before commencing
his PhD, used his professional
background as a way of looking at
the issues within financial markets in a
unique way.
“I specialised in control systems
engineering, and from that perspective,
I saw my research as finding a way of
reducing the effects of any excessive
anomalies in a defined system.
“As engineers, we are given problems
and have to find tools to solve them. I
looked at this research topic in largely
the same way.”
“I harness tools and models from the
areas of computer science, computer
engineering, actuarial science and
statistics, and use them to solve complex
contemporary problems in financial
research and portfolio management.”
Mr Low says he also focused on
behavioural, not just traditional, finance.
“Incorporating behavioural finance is
new. I include the behaviours we hear
about from friends and family who tend
to hold onto shares that are losing
money, but quickly sell ones that are
making small gains.
“The practical outcomes of the research
are the development of a financial model
that can be used as a decision-making
tool for portfolio managers in the asset
allocation process.”
Simply put, Mr Low would like us all
to feel as good about investing as we
do about getting on a plane to go on a
holiday.Persons Rand Low