Tag: systematic-investing

692 words – Reading Time about 3 minutes

Last week Bank of America boldly announced, in a research note no less, “The End of 60/40.” I am shocked they find this newsworthy, much less a topic that requires a dedicated research note. Must be a slow week… Proudly, the Blueprint team has been researching and writing about this topic since 2016, and sincerely believe we originated the phrase The 60/40 Problem back then. Anyone that has visited our website has seen this banner link to a white paper written in April 2016. If you want to get the team really fired up, just ask about the topic. Today though, I thought I would share the more practical Cliffs Notes version to refresh the uninitiated.

The Impact on Advisors (Does Free = Free?)

A frequent topic in our writing is the changing landscape for advisors and investors in terms of the cost of doing business and the impact of technology. With so much rapid change taking place in the industry, there has not been a shortage of material. In fact, it was only a few years ago that things like trading commissions were a major consideration when developing investment strategies. What are now mainstream approaches, like passive investing, robo-advising, and low to no commissions, were once either obscure or did not exist. We are now simultaneously experiencing peak passive and a new low in the race to the bottom on fees.

Vanilla is a fascinating ingredient. It is one of the most popular flavors worldwide and is incredibly common for use in baked goods. The process of creating vanilla flavoring is time-consuming and labor-intensive intensive, which is why in its purest form it is also one of the most expensive spices in the world.

Vanilla’s widespread use and high value alone are not what makes it interesting. Take vanilla and add it to a cake mix and it enhances the flavor, turning an ordinary result into something great. But if you first bake the cake and then drizzle even the highest quality vanilla over it, you have effectively ruined the cake.

At Blueprint, we spend a lot of time articulating the ‘why’ behind our systematic, process-driven investment approach. Our communications with advisors frequently emphasize behavioral finance because we believe that having a transparent process and educating our partners about exactly what to expect leads to better investment outcomes for their clients. Today’s note focuses on another, equally emphasized subject of our writings: advisor practice management. Please read on.