I stand out on the Aptus team for having not played major college basketball, but as an avid fan I can at least contribute to the banter. Complementing the content put out by my playing partners at The Backcourt Report, I periodically share my “Starting Five” posts highlighting the best I can find in the areas of investment management, behavioral finance, and the advisory business. Enjoy, subscribe, share!
Different Kinds of Smart: not sure what else I can say about Morgan Housel, his posts make regular appearances here with an unparalleled ability to create life lessons out of memorable stories. Here he shares five lessons that can be applied across industries, each connected to a story/episode most of us know. Is this now my favorite of all his posts? It just may be.
The (Un)certain Future for Small Advisory Firms: can the Davids of our industry compete with the newly emerging Goliaths? Industry maven Bob Veres says the Davids can not only survive, but lists ten advantages smaller RIA firms have over larger ones. Great read for any advisors looking to grow, big or small.
The invisible doctor, and rewarding incompetence: Dan Egan of Betterment grabs your attention with some hilariously ironic photos, then proceeds to challenge advisors and their clients on seeking better outcomes. There is plenty of blame to share, the point is that effectiveness should matter more than visible effort, even if we all like seeing both.
Alternative Risk Premia: Valuable Benefits for Traditional Portfolios: a geeky reality check for advisors; can the average(even the above average) advisor construct portfolios capable of delivering 5% real returns over the next decade? Forget the behavior required to actually earn that 5%, can traditional asset classes even get you there? Even if you can’t commit to a 15 minute read, at least scan the graphics to help grasp how hard this target really is going forward.
Volatility and Lower Prices: there is no reward without risk, and JD reminds us that avoiding every morsel of volatility also starves a portfolio of returns. There are going to be periods of discomfort(October 2018 will qualify), but that periodic discomfort is part of the reason risk assets can generate positive payoffs in the long-run. The U.S. stock market has been a massive wealth creator, but its benefits have accrued only to those willing and able to tolerate the ups and downs.
Hope you enjoy this edition of our Starting Five, join the updates here!