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Koornwinder Convention. Grand Hotel Amsterdam, 2010

TV-show 'Anno Joosten' 1995

Circles of Knowledge Conference
Marlborough College 2011

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Index Investment

During and after her career as a global market analyst, Herma Koornwinder continuously gave alerts, both in the media and at conferences and seminars on the failure of the passive approach of index investing, an approach that is widely used since its introduction in the economy at the beginning of the fifties.

KGMN makes active investing possible
Management Info

My vision is that global investment, and especially active investment, gives the financial power to fund the jobless society. Otherwise we will not be able to afford the ageing nor the unemployment.’

She continues: ‘And we need to invest more in computer education. In the Far East, some schools work only with computer screens. Here, we have four PCs in a primary school, which are being used only if the teacher feels like it. We need to start exploring; we need to scour the world again for opportunities and possibilities in the Digital Age, just like we did in the Golden Age. Of course, this needs to be funded and that is possible with active investments: no unnecessary risks, no index investments – while making sure that we do not depend on old calculators, because that would be disastrous for the social balance. If we are able to realise a performance increase of one percent, why not do it?’

Interview with Mrs Herma Koornwinder, Dutch stock market guru

The Netherlands has an actual stock market guru in the person of Mrs Herma Koornwinder of Koornwinder Global Market Navigation (KGMN) in the Dutch town of Heeze. She claims that she is able to outperform the market. Therefore, she is no advocate of the so-called index investment, i.e. owning a stock portfolio that matches the stock market index or the average. What is Herma Koornwinder’s secret?

'The investment industry needs to change’
Beleggers Belangen

It is my vision that global investing, in particular active investing, will provide the financial means to fund such jobless society. Therefore I advocate a completely different investment strategy. The focus needs to be on active investing, looking for opportunities. Neither the Modern Portfolio Theory, nor index investment or spreading the risks will consistently lead to good results. This also applies to the ‘growth stock’ trend, the ‘what’s in it must come out’ trend, technical analysis and intuition in particular.

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Erasmus University Rotterdam: Pecunia Forum and Magazine

'You can never go wrong with index investments'
This implies that one accepts beforehand that one’s portfolio will automatically devalue when the index makes a downturn. This is an attitude that completely contravenes all investment logic. It is therefore worth the trouble to keep searching for methods that can prevent devaluation.

Many interviews, lectures and publications. Took a stand against the “efficient market theory”, the Modern Portfolio Theory, index investments and random dispersion when the risk is not known.

"Market undercurrents: The key to good results"
Beursplein 5

What is the secret behind Koornwinder’s success? She does not want to share that, but it is clear that, according to her, most commonly used investment methods fail when seriously researched. “The modern portfolio theory, index investing, risk-spreading, the growth stock trend, the synergy trend, the ‘what’s in it must come out’ trend, the ‘buy low, sell high’ trend, the technical analysis; none of these methods allows for consistent good results,” Koornwinder firmly says.

1999 – autumn
Outdated knowledge equals impotence
S@fe (Robeco)

Supervisors such as the Government Insurance Board, but also participating funds, are increasingly worried about the question whether or not the future pension obligations are in danger. “Responsible managers are already being judged on that,” Professor Tempelaar says. That same urge for certainty – asset liability – leads institutes to mainly invest in so-called quality stock; renowned funds bearing on the national indexes (the Dow Jones, AEX, CAC-40 and DAX). The result: the return on the portfolio is virtually parallel to the decrease or increase of these indicators. If the market is down, the managers have an acceptable excuse. Due to the disappearance of currency risks as the result of the introduction of the euro, institutional investors will emulate the European indexes more and more in the next century.

Investment strategist Herma Koornwinder is baffled by this attitude. Index investment, introduced by the American economist and Nobel Prize winner Harry Markowitz in 1952, is outdated according to her. She thinks pension funds should be able to get a better return by looking for new models. This would be very welcome, as the rapid ageing of the western population is mortgaging future prosperity. “If the pension funds would get even a few percent more return, that problem would be solved.” But, to her great surprise, Koornwinder does not see the financial establishment being very active in this search. However, she remains hopeful. “In the button era of the 21st century, the computer illiterates will most certainly lose out to the Nintendo generation,” she predicts. “They will no longer accept the passive investment method.”

"We are going to get a Flash Economy". Investment advisor Koornwinder predicts enormous changes
De Gooi- en Eemlander

The diving and practicing fitness financial advisor sees more issues which are commonly accepted in the financial world, but which she finds too crazy for words, such as investing according to stock market averages, or indexes. At least two-thirds of the index investors achieved less return than their indicator. “Investment experts have dozed off.”

Index Portfolio
Het Financieele Dagblad

Word definition
Investment portfolio that is, composition wise, identical to the content of a certain index. (Financial Dictionary)

In the news: According to investment expert Herma Koornwinder, the arrival of the information era is undermining the traditional investment models. In this day and age, spreading risks and index investing have been reduced to “mere static truths“.

Investing on the crest of a wave. According to Herma Koornwinder: diginomy catches up with old models
Het Financieele Dagblad

According to Koornwinder, traditional investment models are being undermined by the increase in computer-controlled investment activities that will be the medium in the upcoming era of computerization and computer science: “At present, the spread of risk in index investments is still a static truth. However, with information flashing back and forth around the globe like lightning, it is much easier, faster and more effective to detect investment options the world over. Why should one still invest in gold or bonds when there are other options elsewhere waiting to be picked up?”

'Index investments big misunderstanding'

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