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<br /> • The hidden cost of sub-pennying<br /> • Should regulators ban flash orders?<br /> • Endowments and behavioral finance<br /> • Automated rebalancing and private wealth<br /> • Is market fragmentation good for investors?<br /> • Brains, games, and investment decisions<br /> January/February 2010<br /> Illuminating the<br /> Accruals Anomaly<br /> Everyone agrees that it exists,<br /> but what does it mean?<br /> # """$ $! # ! $ " #"' ! $ <br /> -./0 " "( #"11*( $/0./1 " '"! $!" " !#" ! $! ! " <br /> -/10/1+,0,,(-/10/1+,1,, !!"! ) &#" ! $! % #!" $ "!%"# !<br /> " ! ! $" "" "!" #" # #"!<br /> 34<br /> COLUMNS<br /> 6 In Focus<br /> “Our Pioneering<br /> Spirit<a title="Jan/Feb 2010 CFA Magazine page 1" href="http://viewer.zmags.com/publication/684741a2?page=1"> • The hidden cost of sub-pennying</a> <a title="Jan/Feb 2010 CFA Magazine page 2" href="http://viewer.zmags.com/publication/684741a2?page=2"> # """$ </a> <a title="Jan/Feb 2010 CFA Magazine page 3" href="http://viewer.zmags.com/publication/684741a2?page=3"> 34 COLUMNS 6 In Focus “Our Pion</a> <a title="Jan/Feb 2010 CFA Magazine page 4" href="http://viewer.zmags.com/publication/684741a2?page=4"> No Matter How You Say It, AFG Speaks Glob</a> <a title="Jan/Feb 2010 CFA Magazine page 5" href="http://viewer.zmags.com/publication/684741a2?page=5"> January/February 2010 62 52 4 In Su</a> <a title="Jan/Feb 2010 CFA Magazine page 6" href="http://viewer.zmags.com/publication/684741a2?page=6"> IN SUMMARY That Lofty, Limitless Sky “The side </a> <a title="Jan/Feb 2010 CFA Magazine page 7" href="http://viewer.zmags.com/publication/684741a2?page=7"> <_dWdY_Wb7Zl_iehi CK8 _I^Wh[iI F</a> <a title="Jan/Feb 2010 CFA Magazine page 8" href="http://viewer.zmags.com/publication/684741a2?page=8"> In Focus Our Pioneering Spirit BY JOHN ROGERS,</a> <a title="Jan/Feb 2010 CFA Magazine page 9" href="http://viewer.zmags.com/publication/684741a2?page=9"> Our tools measure performance, monitor exposure, </a> <a title="Jan/Feb 2010 CFA Magazine page 10" href="http://viewer.zmags.com/publication/684741a2?page=10"> Viewpoint The Hidden Cost of “Sub-Pennying” Why</a> <a title="Jan/Feb 2010 CFA Magazine page 11" href="http://viewer.zmags.com/publication/684741a2?page=11"> are allowed to trade in sub-pennies and can step </a> <a title="Jan/Feb 2010 CFA Magazine page 12" href="http://viewer.zmags.com/publication/684741a2?page=12"> Jed Schneider, CIPM Executive Director, Performan</a> <a title="Jan/Feb 2010 CFA Magazine page 13" href="http://viewer.zmags.com/publication/684741a2?page=13"> Viewpoint Big Bang Theory Will the move to stan</a> <a title="Jan/Feb 2010 CFA Magazine page 14" href="http://viewer.zmags.com/publication/684741a2?page=14"> Big Bang Theory Continued from page 11 CDS trans</a> <a title="Jan/Feb 2010 CFA Magazine page 15" href="http://viewer.zmags.com/publication/684741a2?page=15"> </a> <a title="Jan/Feb 2010 CFA Magazine page 16" href="http://viewer.zmags.com/publication/684741a2?page=16"> Viewpoint The CIPM Program: What’s New? BY PHI</a> <a title="Jan/Feb 2010 CFA Magazine page 17" href="http://viewer.zmags.com/publication/684741a2?page=17"> accompanied by multiple-choice questions. From th</a> <a title="Jan/Feb 2010 CFA Magazine page 18" href="http://viewer.zmags.com/publication/684741a2?page=18"> Market </a> <a title="Jan/Feb 2010 CFA Magazine page 19" href="http://viewer.zmags.com/publication/684741a2?page=19"> Figure 2 Euros (cents) 3.0 2.5 2.0 1.5 </a> <a title="Jan/Feb 2010 CFA Magazine page 20" href="http://viewer.zmags.com/publication/684741a2?page=20"> Market </a> <a title="Jan/Feb 2010 CFA Magazine page 21" href="http://viewer.zmags.com/publication/684741a2?page=21"> Ethics FORUM The CFA Institute Professional Cond</a> <a title="Jan/Feb 2010 CFA Magazine page 22" href="http://viewer.zmags.com/publication/684741a2?page=22"> Ethics FORUM Professional Conduct Continued from</a> <a title="Jan/Feb 2010 CFA Magazine page 23" href="http://viewer.zmags.com/publication/684741a2?page=23"> ETHICS FORUM ETHICS Corner I am the portfolio m</a> <a title="Jan/Feb 2010 CFA Magazine page 24" href="http://viewer.zmags.com/publication/684741a2?page=24"> Portfolio PERFORMANCE Clearing the Bar Are CF</a> <a title="Jan/Feb 2010 CFA Magazine page 25" href="http://viewer.zmags.com/publication/684741a2?page=25"> In general, researchers view con- flicts b</a> <a title="Jan/Feb 2010 CFA Magazine page 26" href="http://viewer.zmags.com/publication/684741a2?page=26"> Portfolio PERFORMANCE Continued from page 23 </a> <a title="Jan/Feb 2010 CFA Magazine page 27" href="http://viewer.zmags.com/publication/684741a2?page=27"> As for Gottesman’s view that MBA schools l</a> <a title="Jan/Feb 2010 CFA Magazine page 28" href="http://viewer.zmags.com/publication/684741a2?page=28"> Analyst AGENDA How to Write a Great Research R</a> <a title="Jan/Feb 2010 CFA Magazine page 29" href="http://viewer.zmags.com/publication/684741a2?page=29"> consensus”). In short, be concise. Your re</a> <a title="Jan/Feb 2010 CFA Magazine page 30" href="http://viewer.zmags.com/publication/684741a2?page=30"> Trading TACTICS Flash in the Pan?* Regulators</a> <a title="Jan/Feb 2010 CFA Magazine page 31" href="http://viewer.zmags.com/publication/684741a2?page=31"> cution speed for retail market orders in S&P 500 </a> <a title="Jan/Feb 2010 CFA Magazine page 32" href="http://viewer.zmags.com/publication/684741a2?page=32"> Private CLIENT CORNER Balancing Acts Is autom</a> <a title="Jan/Feb 2010 CFA Magazine page 33" href="http://viewer.zmags.com/publication/684741a2?page=33"> Because rebalancing software is largely ru</a> <a title="Jan/Feb 2010 CFA Magazine page 34" href="http://viewer.zmags.com/publication/684741a2?page=34"> T he U.S. Securities and </a> <a title="Jan/Feb 2010 CFA Magazine page 35" href="http://viewer.zmags.com/publication/684741a2?page=35"> antee program continue to provide in-depth disclo</a> <a title="Jan/Feb 2010 CFA Magazine page 36" href="http://viewer.zmags.com/publication/684741a2?page=36"> MIND GamesWhat can computer games tell us about t</a> <a title="Jan/Feb 2010 CFA Magazine page 37" href="http://viewer.zmags.com/publication/684741a2?page=37"> formance using data from the PSN investment manag</a> <a title="Jan/Feb 2010 CFA Magazine page 38" href="http://viewer.zmags.com/publication/684741a2?page=38"> predictive models. Yet these solutions seem to ha</a> <a title="Jan/Feb 2010 CFA Magazine page 39" href="http://viewer.zmags.com/publication/684741a2?page=39"> “ It feels like people get over traumatic e</a> <a title="Jan/Feb 2010 CFA Magazine page 40" href="http://viewer.zmags.com/publication/684741a2?page=40"> 38 ILLUMINATING THE ACCRUALS ANOMALY BY SUSAN TR</a> <a title="Jan/Feb 2010 CFA Magazine page 41" href="http://viewer.zmags.com/publication/684741a2?page=41"> S ince the accruals anomaly was first </a> <a title="Jan/Feb 2010 CFA Magazine page 42" href="http://viewer.zmags.com/publication/684741a2?page=42"> Morningstar. “An example is Boeing, whose invento</a> <a title="Jan/Feb 2010 CFA Magazine page 43" href="http://viewer.zmags.com/publication/684741a2?page=43"> “If I’m a firm manager and I’m being very, very a</a> <a title="Jan/Feb 2010 CFA Magazine page 44" href="http://viewer.zmags.com/publication/684741a2?page=44"> ING SWIMM 42 </a> <a title="Jan/Feb 2010 CFA Magazine page 45" href="http://viewer.zmags.com/publication/684741a2?page=45"> w i t h S h arks nvesto r ould bewar</a> <a title="Jan/Feb 2010 CFA Magazine page 46" href="http://viewer.zmags.com/publication/684741a2?page=46"> to someone in Mauritius and not expect to get it </a> <a title="Jan/Feb 2010 CFA Magazine page 47" href="http://viewer.zmags.com/publication/684741a2?page=47"> “My Swiss banker promised me they would act exclu</a> <a title="Jan/Feb 2010 CFA Magazine page 48" href="http://viewer.zmags.com/publication/684741a2?page=48"> the family, and I can get you a good deal, and I </a> <a title="Jan/Feb 2010 CFA Magazine page 49" href="http://viewer.zmags.com/publication/684741a2?page=49"> “Gettin g Opti misticAgainAn executive search con</a> <a title="Jan/Feb 2010 CFA Magazine page 50" href="http://viewer.zmags.com/publication/684741a2?page=50"> What is the “Federal Careers Job Fair” l</a> <a title="Jan/Feb 2010 CFA Magazine page 51" href="http://viewer.zmags.com/publication/684741a2?page=51"> Mer when you need them. What a lot of p</a> <a title="Jan/Feb 2010 CFA Magazine page 52" href="http://viewer.zmags.com/publication/684741a2?page=52"> CFA Institute BRIEFS CFA Institute Launches N</a> <a title="Jan/Feb 2010 CFA Magazine page 53" href="http://viewer.zmags.com/publication/684741a2?page=53"> CFA Institute </a> <a title="Jan/Feb 2010 CFA Magazine page 54" href="http://viewer.zmags.com/publication/684741a2?page=54"> CFA Institute BRIEFS CFA Institute held a C</a> <a title="Jan/Feb 2010 CFA Magazine page 55" href="http://viewer.zmags.com/publication/684741a2?page=55"> Asia-Pacific </a> <a title="Jan/Feb 2010 CFA Magazine page 56" href="http://viewer.zmags.com/publication/684741a2?page=56"> CFA Institute BRIEFS University Event CFA P</a> <a title="Jan/Feb 2010 CFA Magazine page 57" href="http://viewer.zmags.com/publication/684741a2?page=57"> Key Objectives for Europe BY NITIN MEHTA E </a> <a title="Jan/Feb 2010 CFA Magazine page 58" href="http://viewer.zmags.com/publication/684741a2?page=58"> Society BRIEFS A Helping Hand CFA societies</a> <a title="Jan/Feb 2010 CFA Magazine page 59" href="http://viewer.zmags.com/publication/684741a2?page=59"> Society </a> <a title="Jan/Feb 2010 CFA Magazine page 60" href="http://viewer.zmags.com/publication/684741a2?page=60"> 58 </a> <a title="Jan/Feb 2010 CFA Magazine page 61" href="http://viewer.zmags.com/publication/684741a2?page=61"> Society </a> <a title="Jan/Feb 2010 CFA Magazine page 62" href="http://viewer.zmags.com/publication/684741a2?page=62"> EDUCATION CALENDAR EUROPE, MIDDLE EAST, & AFRI</a> <a title="Jan/Feb 2010 CFA Magazine page 63" href="http://viewer.zmags.com/publication/684741a2?page=63"> tion (ICMA), and CFA Institute. During this week-</a> <a title="Jan/Feb 2010 CFA Magazine page 64" href="http://viewer.zmags.com/publication/684741a2?page=64"> Chapter 10 The Mysterious Case of the Missing Ret</a> <a title="Jan/Feb 2010 CFA Magazine page 65" href="http://viewer.zmags.com/publication/684741a2?page=65"> and suggests a deal—his bank will lend EU $80 mil</a> <a title="Jan/Feb 2010 CFA Magazine page 66" href="http://viewer.zmags.com/publication/684741a2?page=66"> Illustration: Robert Meganck “A bad market comes </a> <a title="Jan/Feb 2010 CFA Magazine page 67" href="http://viewer.zmags.com/publication/684741a2?page=67"> 3 3 2 3 </a> <a title="Jan/Feb 2010 CFA Magazine page 68" href="http://viewer.zmags.com/publication/684741a2?page=68"> CFA Institute: D_R^\X]V4eT]cb February </a> <a title="Jan/Feb 2010 CFA Magazine page 69" href="http://viewer.zmags.com/publication/684741a2?page=69"> your thinking. your networks. your profession. </a> <a title="Jan/Feb 2010 CFA Magazine page 70" href="http://viewer.zmags.com/publication/684741a2?page=70"> 2001 Nobel Laureate in Economics</a> <a title="Jan/Feb 2010 CFA Magazine page 71" href="http://viewer.zmags.com/publication/684741a2?page=71"> afternoon concurrent sessions: Strategic Opportun</a> <a title="Jan/Feb 2010 CFA Magazine page 72" href="http://viewer.zmags.com/publication/684741a2?page=72"> conference supporters. Exhibitors and sponsors s</a>