Evidence-Based Investing: Peace, Love and Chaos

Join us on the magic bus to the Nov. 15 Evidence-Based Investment Conference in NYC. (http://bit.ly/2c8DmRd)

A Wendy’s Wednesday Whimsy

“There’s something’s happening here | What it is ain’t exactly clear …”

If you’re an American flower-power child from the 60s or 70s (or have similar musical tastes), you’ve probably now got a certain classic protest song injected into your head, which you may be humming all day. You’re welcome.

The song’s title, “For What It’s Worth,” is less familiar. Even less well known is its intent. I was surprised myself when I read on Wikipedia that, despite its 1966 “man with a gun” lyrics, it was apparently not another anti-war song. It was composed in reaction to a 10 pm curfew aimed at clearing out the music-loving party-goers who were congesting Los Angeles’ Sunset Strip. Who knew? Based on the crowds that remain there to this day, I’m guessing that curfew thing didn’t go so well.

Evidence-Based Investing: The Movement

What’s this got to do with evidence-based investing? There’s been something happening here too, baby, in a big way. Any of us who have been part of the movement for a while can’t help but notice it. After years of playing the role of the anti-establishment protester, we’ve recently picked up a mass of followers in the U.S. and around the globe. The crowds are spilling out into the streets.  Suddenly (or so it seems), we pacifist protestors have become the Man, the Establishment, the status quo to rail against.

Continue reading “Evidence-Based Investing: Peace, Love and Chaos”

Evidence-Based Investing and Adviser Gray Matters

For years, advisers like you and service providers like me have been defending evidence-based investing against the opposite of it: Active vs. passive. Alpha vs. beta. Rational vs. emotional. Scientific vs. speculative. Market timing and stock picking vs. risk factors and diversification.

Evidence-Based Investing Gray Matter
© Can Stock Photo Inc.

Evidence-Based Advances

Call it what you will, ours has long been a relatively black and white conversation about “us” vs. “them.” It’s a conversation we’ve gotten good at too, as we state the case for keeping market efficiencies high, unnecessary expenses low and human emotions in check. By keeping our message loud and clear through the years, we’ve been winning over an increasing numbers of investors, fellow advisers, fund providers and even the financial press.

So, congratulations, we’re winning! That’s good news. But I believe it’s also the fuel that’s igniting a new communications challenge. Our black-and-white messages may no longer suffice. These days, expect a finer shade of gray in your conversations, with more nuanced variations on the theme of active vs. passive investing. Continue reading “Evidence-Based Investing and Adviser Gray Matters”

Passive Investing Is Dead … Long Live Evidence-Based Investing

Evidence-Based Investing
© Can Stock Photo Inc.

It’s official. After more than a year of hinting around, I’m ready to say it: I NO LONGER RECOMMEND PASSIVE INVESTING. Allow me to clarify. I remain 110% convinced that it remains your duty and privilege as a fiduciary advisor to help investors understand and apply the same investment principles that have long guided them past Wall Street’s freak shows, onward to their main events. But like it or not, the term, “passive investing” is no longer the best term for describing your continued calling. Henceforth, I’m recommending “evidence-based investing” as the new term for the same cause.

I say “like it or not,” because I’m sorry that the terminology has changed. I’m sorry for at least a couple of reasons. Continue reading “Passive Investing Is Dead … Long Live Evidence-Based Investing”

A Fifteen-Year Reflection on “Passive” Investing

Wendy on Goldwing

Congratulations to me! Today, I celebrate five and 15 years of helping passively minded, fee-only Registered Investment Advisor firms with their varied communications. It’s been 15 years since I joined Buckingham Asset Management/BAM Advisor Services as Director of Communications in January 1998. After a wonderful run there, I and my motorcycle-riding husband spun away to the open roads of Oregon, bidding a fond farewell to BAM. On January 5, 2009, exactly five years ago today, I received my own articles of organization, and Wendy J. Cook Communications, LLC became an official, tax-paying entity.

However you count it, it’s been the best ride of my life (not counting some of the ones I’ve enjoyed on the back of our Honda Goldwing, at right). To celebrate, I thought I’d share some reflections on the evolution of passive investing through the years. Even what we call what we do is evolving as I type. But that’s what makes it so much fun, right? Continue reading “A Fifteen-Year Reflection on “Passive” Investing”