In Search of Higher Returns

There are always sexier and better performing fund managers out there, but should you jump ship?

I was reading The Reformed Broker this afternoon, by the venerable Josh Brown, and came across a concept he made which I agree with, yet don't want to admit to.

Josh brings up the point that retail investors and some institutions get lathered up when they see the latest 3 year track records (as if these indicate the end all of end alls) and decide to hire the latest, sexiest money manager. Josh sees this however as the fail to end all fails, and I have to agree.

Yet, I too want you to be disgruntled enough with your current wealth manager and move your trading capital to us. It's only natural to want to seek out the funds with the best returns.

fish jumping from one bowl to the other

Searching for the Top Performing Managers

We believe we are winners and want to work with clients who see us the same. The reality however is that we are human traders and do make mistakes ourselves. When this happens, hopefully you'll skip over our short-term blunders and consider the reasons you hired us for in the first place.

And Therein Lies the Rub

How can I convert an investor to our fund when the last thing I'd want is they leave when we have our own inevitable downturn? Should I even try? Is it really looking out for their best interests, or is it solely about our desire to increase AUM? It's something to consider, certainly.

As George Orwell once said:

Whoever is winning at the moment will always seem to be invincible.

The truth is, the markets will move against more than 50% of our portfolio someday. Unless you have a crystal ball, losing trades are just part of the game. It could happen tomorrow, next month or next year. It will happen, and that's just how things work. Nobody can win forever.

Aligning Your Investments with a Moral Manager

Where do the intangibles fit in? Where does ethics and morals fit in? Does it exist in the money world? A trader's moral character rarely translate to actual profits, yet I would only want to work with people I believe shared the same moral character that I have.

I'd really love some feedback today. I realize it's not a dilemma, yet The Reformed Broker caused me to reflect. What do I really want for our fund? What do I really want for and from our clients?

When it comes to your business, what are you looking for from your customers? Do you really work to give them what they want and deserve, or do you just tell them what you can do, but do thing your way anyway? I know an awful lot of people who sadly take the last position.

Further reading at Josh Brown's Fired Managers Outperform Hired Managers. Good stuff!

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