Sorry, we aren't selling

Jason Zweig once wrote that “good advice rarely changes, while markets change constantly. The temptation to pander is almost irresistible. And while people need good advice, what they want is advice that sounds good.” This statement is true in practice.

There are three broad categories of people that consider hiring PWL to manage their portfolios. There are people that have done a tremendous amount of research, followed the mountain of evidence that points to our investment philosophy, and discovered us as a result; there are people that have been told about our sensible investment philosophy, high level of service, and excellent advice by someone that they trust; there are people that find us in a Google search and decide to include us as a candidate in a portfolio manager selection process.

In my experience, the first two types of people are quick to become clients; these people have almost made up their minds about investing with PWL before requesting an initial meeting. They either understand how we invest, or have been referred to us by someone that they trust to make these types of recommendations. The third group of people, the ones that want to include us in their portfolio manager selection process, are much less likely to become clients; these people have not usually done in-depth research on investing and financial markets, and are expecting us to give them the amazing sales pitch that will make their decision easy. This is a problem.

Our investment philosophy does not sound exciting. Effectively capturing the long term returns of an efficient capital market, tilting towards dimensions of higher expected returns, and rebalancing? Logical, not exciting. When someone understands the evidence behind this approach, it is obviously the only sensible way to invest. When someone is looking for an engaging story about the need to hedge against rising interest rates by shorting bonds and buying commodities, our evidence-based approach falls short of their expectations. We do our best to save people from the investment industry, but we aren’t here to sell. We are following the evidence and doing what is right.

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