There isn’t an evidence-based investor or advisor around who doesn’t owe an enormous debt of gratitude to John “Jack” Bogle for popularizing index fund investing. He was able to see – and more importantly, stubbornly stick with – a vision of what it could bring to everyday investors, even when his peers were taunting his idea as “Bogle’s Folly.”
Hooray for Bogle; he not only got the last laugh on his detractors, it’s been an incredibly long and lucrative laugh. Well-deserved!
Which brings me to this week’s Wall Street Journal op-ed by Bogle, “Bogle Sounds a Warning on Index, Funds.” In it, he warns of potentially dark days ahead in an industry that could end up being dominated by a few massive fund managers.
Far be it from me to assume Bogle is wrong. There are certainly lessons to be learned from those who laughed at him the last time he stuck to his vanguard guns (pun intended).
That said, I do have a quibble with how he communicated his message. In particular, his data visualization, i.e., the charts and graphs, struck me as disturbingly disingenuous.
As we mad-dash toward another new year, it’s a good time to reflect on fitting friends, old and new.
Take Joe Goldberg, for example, who I met when we both worked at BAM Advisor Services. I went independent back in 2009, while he remained on board as director of retirement plan services until earlier this year. Like me, Joe became his own boss … with a much wider break from past job descriptions. Joe is now in charge of trimming bodies instead of 401(k) accounts at his new fitness studio, TruFusion St. Louis.
I could not be happier for Joe; even back in the day, health & fitness were core to him, as he cajoled BAM conference attendees to get up in the wee hours of the morning to join him for a morning spin. The more sweat, the wider his grin got.
One thing we both took from our years at BAM was a deep appreciation for the “do unto others” mindset you get when you combine dedicated fiduciary advice with rational evidence-based investing. Pair the two together, and you inherently end up with a powerful perspective you can’t ever fully legislate or regulate into being – and that we may too often take for granted.
I realized that when Joe recently posted as follows on Facebook:
Isn’t that just such an “evidence-based advisor” thing to say?
Hey, sometimes this marketing stuff works. Between a few targeted initiatives and the “pay it forward” power wrought by word of mouth, I’m happy to report that my e-newsletter mailing list has grown nicely since I launched my independent business in January 2009. And the pace seems to be picking up. Checking my MailChimp stats today, I’ve welcomed about 250 of you to my mailing list this year; with a grand total of just over 800 subscribers to date.
Better yet, most of you are precisely the community I’m best set to serve: fee-only, independent investment advisors who are spreading evidence-based investing around the globe.
So, welcome, one and all! Are there times you feel a little alone in your evidence-based investing efforts? I thought it might be helpful to offer a rapid round-up of some networking opportunities deliberately dedicated to helping you and yours collaborate on this very subject. I’ve mentioned all of them in past posts, but time and attention spans fly by, so here’s a handy review: Continue reading “A Rapid Roundup of Evidence-Based Advisor Networks”→
Yet another nifty quality of evidence-based investing is that it requires global participation (to provide essential out-of-sample observations), and contributes to it too. As the compelling logic of evidence-based investing goes global, we independent providers – advisors, fund managers and support services alike – have been joining forces as well, to convert elegant, evidence-based theory into practical investor-applicable reality.
Supporting and supported by a global community, I’d like to think we’re coming about as close as we can to building that fabled perpetual motion machine.
Hey, did you catch the recent study that’s been making its way around the popular press: “Buying time promotes happiness”? As perennially popular as happiness tends to be, the media jumped right on this one.
Of course one study – even an academic one – isn’t “proof” according to evidence-based rigor. But this particular one seems about as far-reaching as a stand-alone inquiry can get. It’s co-authored by five academic heavyweights from four universities. Plus it represents four academic disciplines across three countries – the U.S., Canada and the Netherlands. Contributors came from Harvard University’s Business School, the University of British Columbia’s Department of Psychology, Maastricht University’s Department of Finance, and Vrije Universiteit’s Center for Philanthropic Studies.
“[W]orking adults report greater happiness after spending money on a time-saving purchase than on a material purchase.”
I’ve seen a number of posts lately about the value of spending money on spending time … i.e., on having experiences instead of possessions. Tim Maurer recently covered this subject nicely, for example. The study I’m referencing suggests people also derive a lot of pleasure from spending money on saving time or, put another way, on avoiding experiences they’d rather not have, like housekeeping or yard work.
Or how about wealth management? While financial services didn’t seem to come up as a happiness-generating time-saver in this particular study, I’d be willing to bet there are plenty of people who would rather be mowing the lawn than figuring out how to finagle their finances.
So here’s an interesting idea for your marketing & communications: What if you presented the value you bring to your clients in increments of time instead of just the money? Here are some ideas to get you going.
Portfolio management services saves some time. After initial set-up, maybe you’re saving a family a couple of hours every month by managing their portfolio for them. That’s nice, but a decent roboadvisor can take care of that too, so this is just the beginning. Continue reading “Are Your Clients Happy? Time Will Tell”→
Sometimes when I need a brain-break between projects, I spend a few minutes on Facebook, viewing what everybody is up to, sharing a few “likes,” and moving on.
Usually, there’s no harm done. Then, a month or so ago, I stumbled across a hoax about a family who had allegedly held a fiery Viking Funeral that ran amok. According to Snopes, the piece was satire, never intended to be taken seriously. Unfortunately, by the time I saw it, that wasn’t so obvious. The author did such a great job – or maybe real news is sometimes so outrageous these days – that I fell for it, hook, line and sinker, and took it to be true. I also took it and shared it on Facebook.
Hey, remember about a month ago, when I teased you with a nearly ready – and free – Evidence-Based Investment infographic/poster Mineral and I were putting together for you? Today, we are delighted to announce actual availability.
There’s additional information to be had by clicking on “Order It!” But to summarize a few key points:
You can order a high-resolution, print-ready version of the infographic/poster for free.
Mineral will even add your logo and disclaimers before sending it your way (allow a week or so for delivery).
The default primary color is blue, or you can request a different primary color to complement your branding.
If you’d like a printed version of the same, you can order that too. $30 USD to cover costs will score you a big, beautiful 24″x 36″ poster size to display proudly on your office wall ($10 USD more if shipping internationally).
You know evidence-based investing can dramatically improve investors’ expected outcomes. But it can be hard to convince your clients and prospects of that, especially when the markets are acting up. Our clear infographic (with your branding added) will help you explain why you do, what you do, with a simple comparison between evidence-based and traditional active investing.
What’s the Catch?
Seriously, there is none. I’m as passionate about the benefits of evidence-based investing as you are, and I wanted to do my bit to help. If you’d like to stay in touch with me or Mineral, there will be check-boxes you can click to start (or keep) receiving ongoing news from us. But that’s entirely optional. (You can also sign up for my Content-Sharing Library to keep receiving more goodies at reasonable rates.)
True story. When I was in my teens, my mother, brother and I went to see the Indy 500 world-class motorsports race. Through a family connection, we had darn good seats. But in case I got bored, I brought along a book to read. It was hard to ignore all the commotion, but I managed. Let’s just say I was not this kid.
In stark contrast to this delightful child (with the best laugh ever), here I am at 10 years old, impatiently waiting for my dad to finish his photography, so I can get back to it.
Then and now, if I’m not reading, I’m mostly writing. That might explain why, other than even thicker glasses, not much has changed. (I do wish I still had those awesome bell-bottoms!)
It’s also why I don’t get out much, especially to conferences where people gather and (gasp) speak to one another. Most of the time, I’d rather be writing, reading, or reading about writing.
For almost 20 years, I’ve been writing about evidence-based investing (aka, passive investing). I’ve been at it since Humberto Cruz was a familiar syndicated columnist, nationally reporting the passive news as well. Remember him? Cruz retired in 2010 after this final column, but check out how timely his reflections remain:
“Just as investors piled into tech stocks in late 1999 and early 2000, and went into hock to flip condos in 2005-2006, they will flock to whatever investment is ‘hot’ in 2011, increasing the risk of getting burned. Through the years, this self-destructing investor behavior has never changed.”
Before I embarked on my current career, I was a tech-head writer for computing facilities at Washington University in St. Louis, Ralston Purina, and a library software developer you’ve never heard of unless you’re a librarian. Even when I was at BAM Advisor Services, we developed a lot of in-house tech toys, which generated the usual questions about how – and when – to talk about them.
If there’s one rule I learned, it’s that you DO NOT talk up next releases until they’re actually released. With Murphy’s Law in force right up until you flip the switch, anything that can go wrong, probably will. So predicting publication dates and final features is about as wise as forecasting next month’s stock prices, and about as safe as sharing client testimonials (at least here in the U.S.).
So you can understand why I don’t usually announce any goodies before they’re fully baked.
One of the best lessons from last fall’s Evidence-Based Investing Conference in NYC didn’t take place at the conference itself. It happened in the train station, where I met up for a couple of hours with “Annie,” a high school friend I hadn’t seen since the late 70s.
Had Facebook existed then, maybe we would have been better at staying in touch. It didn’t, and we weren’t. Fortunately, the bear hug Annie gave me when we reconnected promptly eliminated any time and distance between us. We jumped right back in where we left off, talking about nothing in particular and everything at once.
One of the things we talked about was this “evidence-based investing” jones that had brought me to the East Coast to begin with. Annie, who is a palliative care senior social worker at a major medical center, said something at the time about the comparative challenge of evidence-based medicine, controlled studies and practical treatments.