Investing Successfully is Really Hard

Research 7.17

My newest column for Research on Wealth magazine is now available. I hope that you will read it as well as the entire issue. The conclusion follows.

“Investing successfully is really hard. Even great investing is really hard to abide. But if you avoid stocks or do not find a way to abide stock market volatility, it will be really, really hard for you to meet your financial goals.”

Investing Successfully is Really Hard

The Boomer Legacy: An Economic Mess

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The online version of my July Research magazine column is available today. In it, I take my baby boomer generation to task for failing to live up to the legacy of those who came before us — most specifically the “greatest generation.” Here’s a taste.

America has been left largely in the hands of us baby boomers, more than 75 million strong. And even though we’ll deny it vociferously, the evidence is clear that we’ve made a mess of things pretty much across the board, in large measure due to our unwillingness to put the interests of our children first. In sum, we are selfish, entitled toads who hate our kids.

I hope you will read the full piece as well as the entire issue of the magazine.

The Boomer Legacy: An Economic Mess

Mastering the Game of Imperfect Forecasting

xx-forecasting-techniques-res-0616-abovethemarket-39-resize-600x338The online version of my monthly Research magazine column — from the June issue — is now available. It discusses “a grand conundrum for the world of finance — we desperately need to make forecasts in order to serve our clients but we are remarkably poor at doing so.” I hope you will read it and the entire issue.

Mastering the Game of Imperfect Forecasting

The Fiduciary Standard Is Far From Enough

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My April Research magazine column is now available online. Here’s a taste.

To repeat my assertion from last month’s column, proper financial advisor priorities begin with a recognition of what is important and what is achievable. Clients and prospects routinely have unreasonable expectations. But they are just as routinely egged on by financial advisors whose own claims and expectations are just as outlandish. The outrageously silly expectations of the consultants described above make the point beyond dispute.

No matter what the DOL and the SEC choose to do or not do in this regard, true success for both advisor and client will require carefully and truly doing the right thing, even when the client doesn’t see it that way. Doing so demands not just a higher standard of care, but also a much higher standard of practice. It should be axiomatic that a higher practice standard will require much higher training and educational standards. Fiduciary standards won’t hurt in that regard, but they aren’t nearly enough either.

I hope you’ll read it all.

The Fiduciary Standard Is Far From Enough

Going Deep with Aaron Watson

Going DeepI am a guest on Aaron Watson’s excellent podcast this week. We talked over a range of issues that regular readers will find familiar but I think interesting. It was an engaging 30 minutes.

The show is available at the link below. I hope you will give it a listen.

Bob Seawright, Using Red Teams to Fight Cognitive Biases

Fixing the Advisory Crisis of Confidence

Hedge Funds 3The digital version of my latest Research magazine column is now available. I hope you will give it a read. Here’s a quick snippet.

Good financial advice is both invaluable and rare. It requires far more than selecting investments. It requires substantial expertise and the ability to manage emotions and expectations. We shouldn’t ever be afraid of saying so and we should never shy away from providing the kinds of service that will demonstrate it beyond doubt.

Fixing the Advisory Crisis of Confidence

Cool News

NEAL_MedallionThe Jesse H. Neal Awards were created in 1955 to recognize and reward editorial excellence in business publications. Unbeknownst to me, ALM (publisher of Research magazine, for which I write a regular column) nominated me in the Best Commentary category using three of my columns (see below). My editor now tells me that I have been named a finalist. I am deeply honored. Other finalists include CIO, Investment News, and Crain’s. The awards ceremony is April 1 in NYC.

The three submitted and thus nominated columns are linked below. I hope you will read them (or read them again).

Investment Advice That Will Pass Time’s Test

The January issue of Research magazine is now available onxx-investment-advice-test-of-time-res-0116-aboveth73-resize-600x338-line and, with it, my Above the Market column. Here’s a taste of the column.

We all want “high leverage” ideas — the ideas that will make the biggest impact on our portfolios and our lives. But the best ideas available are not still more investment recommendations about hot sectors, hot funds, hot strategies and hot managers. There is no reason to think anybody can do that anyway.

The best ideas I can offer relate to our besetting mistakes, mistakes we make over and over again. My high leverage idea for 2016 and beyond is to get off the merry-go-round of the next new thing and to eliminate obvious mistakes first and foremost. As Charley Ellis famously established, investing is a loser’s game much of the time, with outcomes dominated by luck rather than skill and high transaction costs. Thus if we avoid mistakes we will generally win.

To paraphrase the philosopher Immanuel Kant, the first task of reason is to recognize its limitations. Every rational person acknowledges having made many errors. Even so, nobody offers current examples. We all want to think that our mistakes are in the past, that we’ve learned from them and that now we’ve set things right.

We desperately want to believe that our new approach, new strategy or new portfolio will — finally — be the magic elixir that will make us very good, if not great, investors (or at least that we can find those great investors).

I hope you will read the entire piece and the full issue.

Investment Advice That Will Pass Time’s Test

The Advice Business: Make It Personal

res-1015-coverThe October edition of Research magazine is now out and it once again carries my regular column. I hope you will read it and the entire issue. Here’s a quick taste.

We should give our best advice as convincingly and as comprehensively as possible. Yet best practices aren’t always followed. A stellar advisor will recognize when the case for the best approach is lost (but won’t give up too soon) and move on to offer an acceptable alternative. Significantly, a perfect approach, portfolio or product is useless if and when the client refuses to use it or — crucially — stick with it when the going gets rough or when something else comes along. “Pretty good” beats “not at all.”

The Advice Business: Make It Personal

A Musical Lesson for Investors and Advisors

res-0815-annuityanalytics-mi600-resize-600x338The August edition of Research magazine is now out and my column is now available online and is linked below. Here’s a taste.

Sometimes near Christmas Phil would slip out of Avery Fisher Hall after a performance with the Philharmonic, change jackets, and join some Army brass in front of a kettle. He didn’t hear “Bravo!” there. In that context, people who had just paid a lot of money to applaud his virtuosity would routinely ignore him and his music. It was as if he was hiding in plain sight.

In nearly every context and situation, we routinely hear, see and perceive exactly what we expect. No more and no less. Since concertgoers (or more precisely, concert-leavers) didn’t expect a world-class performer to be playing with the Salvation Army on a street corner for free, they didn’t notice when one was doing just that.

I hope you’ll read the whole thing.

A Musical Lesson for Investors and Advisors