Questions? Feedback? powered by Olark live chat software

We did some math.

We, and most advisors, usually start our typical missives with a state-of-the-market update.

We understand now, after doing the math, that most of our investor-clientele probably find reading those updates rather droll, maybe even painful. 

It’s okay. We understand. It's actually not hard to understand. I have yet to attend a lively party where one waxes on about asset prices and the strong dollar on a Friday night.

It was my wife who suggested that maybe our clients have hired us so they don't need to be neck-deep in data, ever. And today, after looking at our own figures, we learned the data confirms this.

We can actually see how many people have opened our email market updates, and it's consistently only been about 30% for the last 5 years. 

So, maybe we're just not making our state-of-the-market storylines compelling enough to the other 70%, our not-so-faithful readers.

Or maybe what we've saying, just isn't that relevant to the 70%.

After scrubbing the data, we're more confident this last thought is actually truer than not. 

You see, about 1/3 of our faithful 30%, are our engineering clients and programmer types. They like detail, and systems, and data. It’s okay, we do too. But for these types of people, there will never, ever be enough data in the world for them to consume. Ever. And that's okay too.

We find cool data here at the shop often, so why not talk about that from time to time? And we do, and we will continue to, from time-to-time. But, if that's all we talk about, that means 70% of our clients aren’t getting their needs (or wants) met if we do the math. And we did.

Doing some more math, about 1/3 of that same 30% are our clients who want validation. We actually talk with them personally, so we know. They want to see that their money people are smart, and connected to the story, about why markets went up or down today, which is really just behavioral finance folly 101 mostly. You know, confirmation bias? 

They want us to confirm what they're feeling and seeing. And if we do, they feel good about themselves, and by association us. And that’s okay too, mostly, because we do often agree (at least, about the "we are smart" part). But that's certainly not our goal in sharing or answering questions.

We tell ourselves that there's not much we can do to help with this kind of bias, except inform them that they have it (and they know they do, and still don't care)... and more often than not, answer their questions with the thoughtful reply of, "we have no idea..." Especially when they ask us, "why is the market up/down...?"

We also conclude that this behavioral bias is better than us pandering to their observational bias though, which is what most talking heads do; where they think the market is going to do X, so we should do.... yeah, no. 

We try to hammer home two things, always: 1) markets can stay irrational a lot longer than you can stay solvent; and 2) you have no idea what's going to happen, and neither do we, nor does anybody else who isn't wearing a tin foil hat.

And for the last, but certainly not least, 1/3 of that 30% who hang onto our magical market missives, they do it simply because they love us, as a verb. 

Their reading, as painful as it may be for them, is an expression of actively loving us, and our little team. Their clicks are simply a vote to support us, which is really an absolutely incredible feeling frankly; like we’re family — and we are.

This is a business that's based on real people with real outcomes and at the end of the day, our business... it's personal. 

Now, for the totality of that 30%, we're going to be making some changes that might feel uncomfortable for the sake of the bigger picture. 

We're going to talk more about success stories, cautionary tales, and mistakes we've seen along the way. In this way, we hope to help our clients and readers feel better informed and more connected. 

We're also going to share more about behavioral finance so hopefully they, and you, can understand more about what makes the brain tick when it comes to money. 

And we hope everyone enjoys each of these stories, and shares them freely, instead of grinning and bearing it, while they listen to us yammer on about GDP growth and unemployment numbers. 

The reality is, while all of these data points do matter, if we're doing our job well, none of it should matter to you, personally, in being successful in reaching your long-term goals. And that's why we're here. 

The sum total of our efforts, helping you reach the sum total of yours.

Our effort to plan and protect our clients should be quite a bit more robust than two bad days in the market, or even 5 bad years. The plans we help our clients make today should be able to weather almost any storm, or at least prepare them for the worst case scenarios no one ever thinks is coming (but can, and does sometimes happen). 

As for our new style of communicating, we’re blogging. Hence the blog post.

This is our firm’s effort to share more freely and publicly, instead of sharing only with our clients.

We're not new to this; blogging is certainly not new, and yet we’re doing this to further along the era of more transparency in an industry that still seems to hate sunlight.

Stay tuned.


Scott Bell, founder