The power of compound growth

We know about it, we talk about it all the time (at least in the retirement savings world!) but because of the way our brains are wired and the mental gymnastics required to really get our head around the power of compounding, the reality (cliched or not) is that we persistently undervalue its true potential. Our brains are hard wired to think in linear terms and therefore the exponential growth available with compounding does not naturally compute for us. We assume saving more later roughly compensates for saving less earlier.

It’s the I of the RR

There are a lot of ways IRRs can be manipulated – for instance by using subscription lines – and its important investors know about these. It’s important to look under the hood of any returns before being overly impressed by a high IRR. But suppose you do all that, and you have a manager who called capital early and got invested well, the IRR reflects the returns you earned, so surely it must be telling you what you earned? Well, maybe. But maybe not, as it still has several issues. For example, if there’s any bias to selling winners early, the IRR will look higher than any returns.

Your organization is investing in AI, where’s the value?

Most organizations are investing heavily in AI but not realizing its full value. Real impact depends on whether people adopt new ways of working and whether those changes improve performance at scale. Most organizations have moved quickly to put AI in employees’ hands. Investments have surged, tools are live and usage is climbing. The 2026 WTW Global EX Market Study found 58% of employers expect AI to fundamentally change how the employee experience is managed in the next three years, rising to 91% within ten years.

Six months on: the investment outlook revisited

 

Lifestyle Actuary

Dalriada Trustees Limited (Dalriada), one of the largest providers of professional trustee services to pensions schemes in the UK, has today announced the appointment of Sarah Brough as a professional trustee.

Lights Camera Actuary

For the next few months Zoe Bolton will be talking to the senior actuaries in these firms, getting a brief insight into their career paths and visions for the future. This month Zoe interviews Shil Patel the UK Managing Director at Dynamo Analytics

Travelling Actuary

This month's Travelling Actuary takes us to the iconic Boston to experience New England at it’s very best.

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