SOMETHING FOR THE WEEKEND
The reputation of British journalism may have taken a knock in recent years, but it’s a profession I’m proud to be part of. I don’t of course condone phone hacking or gross invasion of privacy but, on balance, I still think journalism is a force for good.
That said, I occasionally read an article that makes me squirm with embarrassment, the latest example being a comment piece by Jeff Prestridge in FT Adviser, entitled “It pays to be active”.
Jeff is personal finance editor of the Mail on Sunday, and I agree with much of what he says. For example he recently expressed concern that the Financial Conduct Authority is in danger of becoming a puppet for the Treasury, that it’s too soft on the City and that it needs more consumer champions on its board. He’s right on all three.
But I couldn’t disagree more with his views on the retail fund sector. It’s an industry, he says, of which we can be “really proud.. an example of an industry that has put the great in Great Britain”.
The less you pay the more you end up with
Another major study has been released, comparing the performance of active funds with passive, and you’ll never guess the result!
Only joking. Passive smashed active yet again. The latest data comes from Morningstar’s Active/ Passive Barometer, which measures the performance of US-domiciled funds over one, three, five and ten years.
In common with similar scorecards, the best known of which is SPIVA, produced by S&P Dow Jones Indices, the Morningstar data shows the longer the time period, the worse the performance for active funds. Just 27.7% of large-cap blend funds beat their passively managed counterparts in the calendar year 2015; that percentage fell to 16.6% over ten years.
The making of an evidence-based investor
One of the biggest problems facing those of us who write about evidence-based investing is the subject matter. It’s not, let’s face it, particularly exciting. As Jason Zweig once said, “My job is to write the exact same thing between 50 and 100 times a year in such a way that neither my editors nor my readers will ever think I am repeating myself”.
It’s even more of a challenge when writing a book on the subject. Active investors always have new things to say, new ideas and personalities to write about; and people are bound to be more interested in books that show them how to get rich quickly than those that advocate the slower, steadier route.
But with Odds On: the Making of an Evidence-Based Investor, Matt Hall has managed to find a winning formula. How? By describing his personal journey. His story takes us from his early career on Wall Street, where he grew disillusioned with the traditional investing model, to his discovery of evidence-based investing; he goes on to describe how an epiphany brought on by life-threatening illness helped him to overcome initial resistance, as he began to guide investors towards a more rational and rewarding approach to money management.
Other TEBI posts you may have missed
New adviser-branded video series
Next week I will be announcing details of the latest addition to Regis Media’s growing range of pre-produced video content for financial advisers.
We already have two series available — Six Steps to Successful Investing and Evidence-Based Investing Insights. From Monday you will also be able to order a third series, called The Value of Advice. It’s a five-part series of infographic videos setting out the reasons why people should seek professional advice rather than trying to manage on their own.
As with the previous two series, it will be tailored to each advisory firm, and will carry the subscriber’s branding and contact details/ call-to-action/ disclaimer as required.
There are separate versions of all three series, targeted at specific markets — principally the UK and Ireland, the United States, Canada, Australia and New Zealand. The videos are also available in Dutch and in German.
If you’re interested in using any of our video content, please contact Sam Willet at email@example.com or Christina Waider at firstname.lastname@example.org for more information. Alternatively you can call us on +44 (0)121 285 2585.
How do you go about finding the right adviser? (Cinthia Murphy)
The first thing you should look for in an adviser is honesty (Carl Richards)
Personal finance is personal (Ben Carlson)
Three deadly sins of retirement investing (Eric Nelson)
Good investors know their market history (Monevator)
If you’re a contrarian you’re like everyone else (Barry Ritholtz)
The importance of creating small financial planning goals (Michael Kitces)
I blogged recently about the fact that I’ve joined the Transparency Task Force, an exciting new initiative aimed at promoting higher levels of transparency in the investing industry in the UK and beyond.
If you want to get involved, the contact details are on the TTF website, which is currently under construction.
I’m going to be speaking at TTF symposium on 22nd June in London. Tickets aren’t yet available, but please pencil the date in your diary if you’re interested.
Have a great weekend!