THINKING FORWARD – Ideas for your work from MIT Sloan School of Management

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Ideas for your work from
MIT Sloan School of Management | Office of Communications

+ THREE INSIGHTS FOR THE WEEK
March 21 – March 27, 2021

1. Target date funds are a staple in many workplace retirement plans. Often used as a default investment option, TDFs effectively relieve investors of having to actively rebalance their portfolios between stocks and bonds.

TDFs have proved popular — so much so that researchers wondered what impact they had on the market. “There’s an awful lot of money involved in this sort of trading,” said MIT Sloan professor of finance Jonathan Parker, who authored a working paper along with professor of finance and entrepreneurship Antoinette Schoar and Brandeis University’s Yang Sun.

The authors found TDFs have “quantitatively large effects” on the mutual funds they buy and sell — and that, in turn, is having some effect on the prices of the stocks these mutual funds hold.

By adopting a “market-contrarian strategy” that trades against aggregate stock market momentum and fluctuations, the authors speculate that TDFs may be stabilizing the market and reducing volatility.

If stock prices rise because of positive sentiment or irrational exuberance, “then having the target date fund lean against that and sell stock when the sentiment gets high is a good thing for stabilizing the stock market,” Parker said.

 

2. Digital health care is skyrocketing, as 2020 saw more patients than ever take advantage of video visits, phone calls, emails, and text messages to access safe, convenient care during the pandemic.

But hurdles remain, said officials from digital health firms Teladoc, Maven, and InterSystems. Speaking on a panel at the recent MIT Sloan Healthcare and BioInnovations Conference, the executives detailed four challenges for the nascent industry:

  • Data interoperability. Right now, most electronic health record systems don’t speak to one another, making it difficult to assemble a complete record of a patient’s care.
  • Maintaining personal connections. Because virtual health visits tend to be one-offs for acute needs, providers need to find ways to maintain ongoing connections with patients.
  • Equitable access to virtual care. In building their products, digital health companies have a responsibility to ensure that access to technology doesn’t further widen the digital divide, panelists agreed.

Reimbursement. The rate at which telehealth visits are reimbursed, and which services count as “telehealth,” remains in the combined hands of state legislatures, government agencies, and insurance companies.

 

3. Anita Kibunguchy, product marketing lead at Google, is used to gender imbalance in the workplace. “I always knew going into tech that there would be very few of us, especially Black women,” said Kibunguchy, MBA ’15.

That’s one reason she founded AdviceMavens, a career services company with a mission to connect, cultivate, and empower people to advance their professional careers and personal lives.

In a recent Q&A, Kibunguchy shared her thoughts on hiring and the power of mentorship:

Who has been an ally or mentor for you? Over time, I’ve met incredible people who’ve taken a chance on me. Most recently, two of my male, white bosses have come through for me, letting me lead a team and giving me the resources to do so. I am truly appreciative, because this is an opportunity of a lifetime, and not everyone is lucky to say so.

Where do you see progress in making the workplace more diverse? Progress will come when we can hire diverse candidates and put structures in place to help them really soar. Retention plays a big role. Once you retain folks, then others see them at these workplaces and choose to join them.

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