<br />
• The hidden cost of sub-pennying<br />
<br />
• Should regulators ban flash orders?<br />
<br />
• Endowments and behavioral finance<br />
<br />
• Automated rebalancing and private wealth<br />
<br />
• Is market fragmentation good for investors?<br />
<br />
• Brains, games, and investment decisions<br />
<br />
<br />
<br />
January/February 2010<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
Illuminating the<br />
Accruals Anomaly<br />
<br />
Everyone agrees that it exists,<br />
but what does it mean?<br />
# """$ $! # ! $ " #<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> • The hidden cost of sub-pennying<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">34COLUMNS6 In Focus “Our Pion</a> 34COLUMNS6 In Focus “Our Pion<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> No Matter How You Say It,AFG Speaks Glob<a title="Jan/Feb 2010 CFA Magazine page 5" href="http://viewer.zmags.com/publication/684741a2?page=5">January/February 201062524 In Su</a> January/February 201062524 In Su<a title="Jan/Feb 2010 CFA Magazine page 6" href="http://viewer.zmags.com/publication/684741a2?page=6">IN SUMMARYThat Lofty, Limitless Sky“The side </a> IN SUMMARYThat Lofty, Limitless Sky“The side <a title="Jan/Feb 2010 CFA Magazine page 7" href="http://viewer.zmags.com/publication/684741a2?page=7"><_dWdY_Wb7Zl_iehiCK8 _I^Wh[iI F</a> <_dWdY_Wb7Zl_iehiCK8 _I^Wh[iI F<a title="Jan/Feb 2010 CFA Magazine page 8" href="http://viewer.zmags.com/publication/684741a2?page=8">In FocusOur Pioneering SpiritBY JOHN ROGERS,</a> In FocusOur Pioneering SpiritBY JOHN ROGERS,<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> Our tools measure performance, monitor exposure,<a title="Jan/Feb 2010 CFA Magazine page 10" href="http://viewer.zmags.com/publication/684741a2?page=10">ViewpointThe Hidden Cost of “Sub-Pennying”Why</a> ViewpointThe Hidden Cost of “Sub-Pennying”Why<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> are allowed to trade in sub-pennies and can step <a title="Jan/Feb 2010 CFA Magazine page 12" href="http://viewer.zmags.com/publication/684741a2?page=12">Jed Schneider, CIPMExecutive Director, Performan</a> Jed Schneider, CIPMExecutive Director, Performan<a title="Jan/Feb 2010 CFA Magazine page 13" href="http://viewer.zmags.com/publication/684741a2?page=13">ViewpointBig Bang TheoryWill the move to stan</a> ViewpointBig Bang TheoryWill the move to stan<a title="Jan/Feb 2010 CFA Magazine page 14" href="http://viewer.zmags.com/publication/684741a2?page=14">Big Bang Theory Continued from page 11CDS trans</a> Big Bang Theory Continued from page 11CDS trans<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">ViewpointThe CIPM Program: What’s New?BY PHI</a> ViewpointThe CIPM Program: What’s New?BY PHI<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> accompanied by multiple-choice questions. From th<a title="Jan/Feb 2010 CFA Magazine page 18" href="http://viewer.zmags.com/publication/684741a2?page=18">Market </a> Market <a title="Jan/Feb 2010 CFA Magazine page 19" href="http://viewer.zmags.com/publication/684741a2?page=19">Figure 2 Euros (cents)3.02.52.01.5</a> Figure 2 Euros (cents)3.02.52.01.5<a title="Jan/Feb 2010 CFA Magazine page 20" href="http://viewer.zmags.com/publication/684741a2?page=20">Market </a> Market <a title="Jan/Feb 2010 CFA Magazine page 21" href="http://viewer.zmags.com/publication/684741a2?page=21">EthicsFORUMThe CFA Institute Professional Cond</a> EthicsFORUMThe CFA Institute Professional Cond<a title="Jan/Feb 2010 CFA Magazine page 22" href="http://viewer.zmags.com/publication/684741a2?page=22">EthicsFORUMProfessional Conduct Continued from</a> EthicsFORUMProfessional Conduct Continued from<a title="Jan/Feb 2010 CFA Magazine page 23" href="http://viewer.zmags.com/publication/684741a2?page=23">ETHICS FORUMETHICSCornerI am the portfolio m</a> ETHICS FORUMETHICSCornerI am the portfolio m<a title="Jan/Feb 2010 CFA Magazine page 24" href="http://viewer.zmags.com/publication/684741a2?page=24">PortfolioPERFORMANCEClearing the BarAre CF</a> PortfolioPERFORMANCEClearing the BarAre CF<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> In general, researchers view con-flicts b<a title="Jan/Feb 2010 CFA Magazine page 26" href="http://viewer.zmags.com/publication/684741a2?page=26">PortfolioPERFORMANCEContinued from page 23</a> PortfolioPERFORMANCEContinued from page 23<a title="Jan/Feb 2010 CFA Magazine page 27" href="http://viewer.zmags.com/publication/684741a2?page=27"> As for Gottesman’s view thatMBA schools l</a> As for Gottesman’s view thatMBA schools l<a title="Jan/Feb 2010 CFA Magazine page 28" href="http://viewer.zmags.com/publication/684741a2?page=28">AnalystAGENDAHow to Write a Great Research R</a> AnalystAGENDAHow to Write a Great Research R<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> consensus”). In short, be concise. Your re<a title="Jan/Feb 2010 CFA Magazine page 30" href="http://viewer.zmags.com/publication/684741a2?page=30">TradingTACTICSFlash in the Pan?*Regulators</a> TradingTACTICSFlash in the Pan?*Regulators<a title="Jan/Feb 2010 CFA Magazine page 31" href="http://viewer.zmags.com/publication/684741a2?page=31">cution speed for retail market ordersin S&P 500 </a> cution speed for retail market ordersin S&P 500 <a title="Jan/Feb 2010 CFA Magazine page 32" href="http://viewer.zmags.com/publication/684741a2?page=32">PrivateCLIENT CORNERBalancing ActsIs autom</a> PrivateCLIENT CORNERBalancing ActsIs autom<a title="Jan/Feb 2010 CFA Magazine page 33" href="http://viewer.zmags.com/publication/684741a2?page=33"> Because rebalancing software islargely ru</a> Because rebalancing software islargely ru<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> T he U.S. Securities and <a title="Jan/Feb 2010 CFA Magazine page 35" href="http://viewer.zmags.com/publication/684741a2?page=35">antee program continue to providein-depth disclo</a> antee program continue to providein-depth disclo<a title="Jan/Feb 2010 CFA Magazine page 36" href="http://viewer.zmags.com/publication/684741a2?page=36">MINDGamesWhat can computer games tell us aboutt</a> MINDGamesWhat can computer games tell us aboutt<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> formance using data from the PSN investment manag<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> predictive models. Yet these solutions seem to ha<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> “ It feels like people get over traumatic e<a title="Jan/Feb 2010 CFA Magazine page 40" href="http://viewer.zmags.com/publication/684741a2?page=40">38ILLUMINATING THEACCRUALSANOMALYBY SUSAN TR</a> 38ILLUMINATING THEACCRUALSANOMALYBY SUSAN TR<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> S ince the accruals anomaly was first <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> Morningstar. “An example is Boeing, whose invento<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> “If I’m a firm manager and I’m being very, very a<a title="Jan/Feb 2010 CFA Magazine page 44" href="http://viewer.zmags.com/publication/684741a2?page=44">INGSWIMM42 </a> INGSWIMM42 <a title="Jan/Feb 2010 CFA Magazine page 45" href="http://viewer.zmags.com/publication/684741a2?page=45">wi t hSharksnvestor ould bewar</a> wi t hSharksnvestor ould bewar<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> to someone in Mauritius and not expect to get it <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> “My Swiss banker promised me they would act exclu<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> the family, and I can get you a good deal, and I <a title="Jan/Feb 2010 CFA Magazine page 49" href="http://viewer.zmags.com/publication/684741a2?page=49">“GettingOptimisticAgainAn executive search con</a> “GettingOptimisticAgainAn executive search con<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> What is the “Federal Careers Job Fair” l<a title="Jan/Feb 2010 CFA Magazine page 51" href="http://viewer.zmags.com/publication/684741a2?page=51">Merwhen you need them. What a lot of p</a> Merwhen you need them. What a lot of p<a title="Jan/Feb 2010 CFA Magazine page 52" href="http://viewer.zmags.com/publication/684741a2?page=52"> CFA InstituteBRIEFSCFA Institute Launches N</a> CFA InstituteBRIEFSCFA Institute Launches N<a title="Jan/Feb 2010 CFA Magazine page 53" href="http://viewer.zmags.com/publication/684741a2?page=53">CFA Institute </a> CFA Institute <a title="Jan/Feb 2010 CFA Magazine page 54" href="http://viewer.zmags.com/publication/684741a2?page=54"> CFA InstituteBRIEFSCFA Institute held a C</a> CFA InstituteBRIEFSCFA Institute held a C<a title="Jan/Feb 2010 CFA Magazine page 55" href="http://viewer.zmags.com/publication/684741a2?page=55">Asia-Pacific </a> Asia-Pacific <a title="Jan/Feb 2010 CFA Magazine page 56" href="http://viewer.zmags.com/publication/684741a2?page=56"> CFA InstituteBRIEFSUniversity EventCFA P</a> CFA InstituteBRIEFSUniversity EventCFA P<a title="Jan/Feb 2010 CFA Magazine page 57" href="http://viewer.zmags.com/publication/684741a2?page=57">Key Objectives for EuropeBY NITIN MEHTAE </a> Key Objectives for EuropeBY NITIN MEHTAE <a title="Jan/Feb 2010 CFA Magazine page 58" href="http://viewer.zmags.com/publication/684741a2?page=58"> SocietyBRIEFSA Helping HandCFA societies</a> SocietyBRIEFSA Helping HandCFA societies<a title="Jan/Feb 2010 CFA Magazine page 59" href="http://viewer.zmags.com/publication/684741a2?page=59">Society </a> Society <a title="Jan/Feb 2010 CFA Magazine page 60" href="http://viewer.zmags.com/publication/684741a2?page=60">58 </a> 58 <a title="Jan/Feb 2010 CFA Magazine page 61" href="http://viewer.zmags.com/publication/684741a2?page=61">Society </a> Society <a title="Jan/Feb 2010 CFA Magazine page 62" href="http://viewer.zmags.com/publication/684741a2?page=62">EDUCATION CALENDAREUROPE, MIDDLE EAST, & AFRI</a> EDUCATION CALENDAREUROPE, MIDDLE EAST, & AFRI<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> tion (ICMA), and CFA Institute.During this week-<a title="Jan/Feb 2010 CFA Magazine page 64" href="http://viewer.zmags.com/publication/684741a2?page=64">Chapter 10The Mysterious Case of the Missing Ret</a> Chapter 10The Mysterious Case of the Missing Ret<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> and suggests a deal—his bank will lend EU $80 mil<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> Illustration: Robert Meganck“A bad market comes <a title="Jan/Feb 2010 CFA Magazine page 67" href="http://viewer.zmags.com/publication/684741a2?page=67"> 3 3 2 3</a> 3 3 2 3<a title="Jan/Feb 2010 CFA Magazine page 68" href="http://viewer.zmags.com/publication/684741a2?page=68">CFA Institute: D_R^\X]V4eT]cbFebruary </a> CFA Institute: D_R^\X]V4eT]cbFebruary <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> your thinking. your networks. your profession.<a title="Jan/Feb 2010 CFA Magazine page 70" href="http://viewer.zmags.com/publication/684741a2?page=70">2001 Nobel Laureate in Economics</a> 2001 Nobel Laureate in Economics<a title="Jan/Feb 2010 CFA Magazine page 71" href="http://viewer.zmags.com/publication/684741a2?page=71">afternoon concurrent sessions: Strategic Opportun</a> afternoon concurrent sessions: Strategic Opportun<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> conference supporters.Exhibitors and sponsors s