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!
- Real World vs. Book Knowledge: “People in the wild are different from people on paper. Study accordingly”. No truer statement can be made about this wonderful profession of ours, and no writer can capture it in story form better than Morgan Housel.
- Mean Reversion & The Placebo Effect: as we’d expect, a lot of common sense here about the ebb and flow of markets getting sick and getting well. Paraphrasing Ben, “Probabilistic thinking helps you avoid the allure of certainty, and allows you to think in terms of a range of outcomes.” Yep.
- Fifteen Shades of Grey: wouldn’t even attempt to pick one of these 16 as my favorite(OK, “there is no such thing as passive investing” is too good to not mention). This is what happens when you know your subject so well that you can pack years of wisdom into an easy-to-digest blog post. Bravo Phil.
- 10 Ways RIAs Can Crush It for the Next 5 Years: really good, and from a source who knows a thing or two about growing advisory firms. A billion dollars or not, every firm could benefit from embracing one if not all of these pearls of wisdom addressing the why, who, and how of an advisory practice.
- The Dangerous Disregard for Fat Tails in Quantitative Finance: I’m going to take the liberty of paraphrasing because the article is too geeky to interest most. “Our investment assumptions are BS cause we don’t have nearly enough data” or “Putting my head in the oven and feet in the fridge is a funky way to achieve an average temperature”. But a lot of hard truths here that should at least be considered when handling precious retirement savings.
Two off the bench for you from Morningstar, if log-in wasn’t required they’d have been starters. For those with access, I heartily recommend “You Can’t East Risk-Adjusted Returns But They Still Might Nourish” and “It’s Not Too Early to Plan For Mutual Fund Capital Gain Distributions“. Well-researched, well-written, and real considerations for advisors and their clients in minimizing the behavior gap and maximizing after-tax returns.
Hope you enjoy this edition of our Starting Five, join the updates here!