From Jeremy Torgerson, CEO of nVest Advisors:
That’s not my quote. That’s from a guy who just lost a huge amount of money trying to out-smart the market, and he wants to warn you.
As I’m closing up shop tonight (from our new standing trading desk), a column caught my eye and I wanted to share it with our clients, prospective clients, and anyone else in the investing world who either thinks they’re smarter than time-honored investing principles, or has an advisor telling you he or she is.
The recent market volatility presented both an opportunity to buy stocks cheaply and for investors to make emotional (greed or panic) decisions about their investments. A huge part of my job as an advisor is to make sure our clients don’t make those same errors.
At nVest Advisors, we simply don’t gamble with money, especially money our clients can’t afford to lose.
As an investor, you should always, always adhere to that same principle.
Believe me, no one feels the sting of market corrections more acutely than a fidicuary advisor, like us, who carries the enormous weight of shepherding your life savings.
And it is because we know that you are trusting us with not only your account as it is today, but what you need that account to do for you in the future, that we never take unnecessary risks with your money.
Unfortunately, this business has a lot of ego in it. To make a name for yourself, and attract a lot of clients, many advisors decide the way to differentiate themselves from the rest is to try out untested or wildly risky strategies, to see if they can beat the market.
If they claim they can, they’re heralded as geniuses, and business flows to them, even though their past returns (if legitimate) are almost guaranteed to never repeat. In essence, they caught lightning in a bottle once.
When (not if) they are wrong, the results can be disastrous.
Case in point: a former financial advisor writes a confession today in the edgy, conspiratorial (and notoriously wrong) blog Zero Hedge that I want every investor, whether you’re a client or not, to read.
(This is the ONLY article so far on Zero Hedge that I’d ever recommend, to make that clear. Read it and then get off the site and stay there, for your financial future’s sake.)
In it, this former financial advisor admits that the time-honored principles of simplicity, diversification, goal-oriented (instead of market-driven), quality-over-sexy investing served him and his clients well for decades:
“I spent the majority of my professional life in compliance, but before that, I was an investment adviser who only dealt in passive, diversified asset-class based mutual fund investing.
It was slow and boring, but it worked. Really well. I not only did really well for our clients, but also my own money. It was simple, BUY WHEN YOU HAD MONEY and SELL WHEN YOU NEEDED MONEY. Don’t sweat the small details, we’re properly diversified to minimize risk (which worked) and we’ll catch the ups, of which there are always many.
I used that system for decades, including the first 3 years of our retirement.”
And then, hubris and arrogance took hold.
You can read the article for yourself, but to sum it up, he got overconfident, starting trying to “bling” up his investing strategies, believing he could out-smart the investment world.
And he failed. Dramatically.
I would never wish an investor harm – a life’s work down the drain is something I would never wish on my worst enemy (and he’s not claiming to be broke, just devastated a portion of his net worth). So please, take his words of caution to heart and stick to what has been proven to work over many decades, many ups and downs, many US Presidents, and many economic cycles.
nVest Advisors has very specific beliefs about how to plan and save for your future. We tough through typical market volatility, staying focused instead on what your money needs to do for you at a later date, instead of what it’s doing in the market today. We choose quality over “sexy”, every time. We chop away at trading expenses to help bouy your returns over time. And we stay right with you, in a personal relationship with you, all the way to the finish line.
And, we do our level best to “talk you off the ledge” when markets get spooky. We’ve written about it here and here and here and here and here and here and here and here. And that’s all just in the last 3 years.
If this kind of philosophy appeals to you, we’d love to talk to you and see if you’d be a good fit for nVest Advisors. Feel free to schedule a phone call or visit with me personally, and we can see if what we believe in, what we do and how we do it, makes sense for your personal or small business’ investing needs.
And for those few of our clients who might have politely smiled and nodded but secretly wanted to chuck bricks through the office window over the past three or four months, you’re welcome. 🙂
nVest Advisors, CEO