facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause

How Do You Spell Investor Success?

As my wife Valerie and I approach our 20th wedding anniversary in early April we are finding ourselves making some last minute decisions on how to celebrate. Sure, the big, round number feels great; an occasion to pause and reflect. But anyone who’s been in a significant relationship for any length of time knows that numbers alone don’t spell marital success. What matters the most is the quality of life you’ve built together in whatever time you’ve shared.

The same can be said about investing. Of course the numbers — your short term investment returns — are helpful in gauging how you’re doing. But compared to what? Out of the context of our life’s goals, the numbers lose their meaning. It should be the investor, not the investment that matters the most.

And yet the financial industry seems determined to fool us into thinking otherwise. Maybe because trends and data points are a lot easier to report on than individual well-being, most financial headlines fixate on the numbers. The sheer volume of information tempts us to do the same. You’re left to assume, with all the attention on short term results, it must be the most important thing.

As an investment advisor, I consider it among my obligations to remain abreast with the market’s current events, as well as with the larger science of capital markets. How are the investment returns generated? How can we most efficiently capture them, and maximize our dollars after taxes and investment costs? With new discoveries come promising new possibilities to consider.

I wouldn’t be doing all I could on behalf of my clients were I to fail to remain informed in my area of expertise. And so I do. I collaborate with like minded colleagues about best practices. I read financial books and peer-reviewed technical journals that explore the latest in academic thinking. I meet with product and service providers to seek the proverbial better mouse traps. I question, assess, critique … and ultimately extract and deliver the sensible practical applications that I feel are in my clients’ highest interests. I even admit, though with some reluctance, that I watch the “opinions of experts” on the cable financial news channels too.

In any case, that’s me; because I enjoy sorting out the financial speak of charts and graphs, statistics, and data. Thanks to the media’s infatuation with the latest numbers many investors translate these opinions and speculations into hopeful outcomes that often lead to poor investment decisions.

As such, one of my biggest jobs is helping clients ignore the loads of irrelevant information glut about investments, so they can focus their energy on their goals as knowledgeable investors. As one of my favorite financial authors, Larry Swedroe, has observed, “When it comes to investing, there’s a major difference between information and knowledge. Information is a fact, data, or an opinion held by someone. On the other hand, knowledge is information of value. Confusing the two is a major mistake.”

That’s why I keep up with all that information out there (and why it may be in your own best interest not to), so I can best help you translate it into knowledge you can use to achieve your own true goals. Investment returns are volatile and risky. Investor goals are durable and long-term. My job is to apply the former to achieve the latter by devoting the bulk of my services to helping clients invest sensibly: managing appropriately for the risk, staying on course according to their goals, minimizing inefficiencies and costs along the way. Thus helping people make prudent decisions as long-term investors relevant to personal, real world, goals and objectives.

Back on the subject of our upcoming anniversary, my wife and I are in negotiations about how to celebrate the occasion. She’s suggesting a voyage to a warmer climate. I was thinking something more like a hike in Montana. I’ll let you know who wins but, if our own long-term history is any guide, I have a feeling I’ll be packing some Bermuda shorts.