Beware the assumption of mean reversion is one of the lessons learned from last year by the team at Mawer Investment Management Ltd. It the article ‘Three Investment Lessons From 2015’ at the Private Wealth Canada website, Kara Lilly, an investment strategist at Mawer, says one of the greatest surprises to investors last year was the continued slide in the price of oil. Many assumed that prices would dip and then return to a more normalized range between $60 and $80. This is a good example of assuming mean reversion ‒ that prices will naturally revert back to their mean.
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