As a parent, I try to encourage my daughters to be inquisitive and develop cognitive skills by answering their questions with explanations that encourage conversation. Note that I said, “try,” because I’m certainly guilty of looking at them in the rearview mirror and letting out a, “Because I said so!” from time to time.
Mike Carlone
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Topics: Systematic Investing
Something that unites almost every asset manager that believes it uses a disciplined, repeatable investment process is our annoyance with performance chasing. The root of this frustration is how performance becomes a shiny object that can distract some investors, and even some financial advisors. It can be particularly difficult to look away from the shine during prolonged bull markets, when human nature makes investors feel more invincible.
Here’s an ironic twist: The other day I realized that Blueprint Investment Partners, as a trend follower, actually has plenty in common with performance chasers. Except for one (gigantic) difference.
Topics: Systematic Investing
Well, here we are again.
It’s that time of year when many asset managers like to make predictions about the year ahead, while Blueprint Investment Partners calls attention to the foolishness of that exercise. As evidence, I give you this January 2022 tweet from Bloomberg media personality Jonathan Ferro, who recaps how 14 leading financial firms foresaw the S&P 500 ending 2022.
Their guesses lend credence to my assertion that one of the only annual market predictions worth making is this: Following a consistent, disciplined investing process will lead to better outcomes than trusting the predictions of financial “experts.”
Topics: Systematic Investing
Systematizing the Referral Process for Financial Advisors
Remember that episode of “Seinfeld” where Uncle Leo gets Jerry’s father a last-minute appointment with a top notch back doctor? And when Jerry’s father accuses the office of stealing his wallet, Uncle Leo is mortified since he gave a personal recommendation and asked the back specialist for such a big favor.
Although this scenario was from a sitcom, it is not far off from the view of the financial advisory world held by Mike Garrison, a business coach and best-selling author. In his just-released book, “Can I Borrow Your Car?” Mike highlights the importance of knowing and trusting both parties in a referral: who you’re referring and who you’re referring to. If you “loan” a key relationship out by making an introduction, you want absolute confidence the individual will come back to you without dings, dents, or scrapes.
Topics: Advisor Practice Management
Let’s face it. If you have clients with any level of exposure to traditional assets, such as stocks or bonds, 2022 has been unpleasant. Equities closed at all-time highs in 2021, then steadily declined in 2022. Bond investors have arguably had it worse, certainly on a risk-adjusted basis.
Just when you think it can’t get much worse, unless your clients are in tax-managed strategies, another round of pain could be on the horizon. Taxes.
We hate to be the bearers of bad news, but investors – particularly those in active or semi-active mutual funds – could be in for trouble.
Topics: Systematic Investing