Why Is Systematic Investing Important? (1)

AAA Quants
7 min readNov 3, 2021

by Tom Starke and Qian Zhu

What is systematic investing? Do we really need systematic investing to stay ahead of the game?

This article discusses the complexities of the investment process and how human biases can lead to suboptimal investment decisions. A systematic investment process can overcome such biases and potentially produce better outcomes for investors. This article was originally presented to a group of high net-worth investors. A video of the presentation can be found here.

This is part 1 of the series, and I’m going to show you how behavioural human biases can lead to suboptimal investment decisions and how important it is to invest systematically.

What is the optimal strategy?

Let’s start with a thought experiment: imagine you have a biased coin — one that has a 51% chance of getting heads and a 49% chance of getting tails. My question is: how much should you invest in each of the thousand coin tosses?

Now, in order to understand this, let’s just rationalise what we could do. Maybe we should invest 100% in each coin toss? Let’s say we have…



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