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By Ben Carlson

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Agenda
1. Why Women Make Better Investors Than Men

2. Some Common Sense Thoughts on Investing

3. How We Turned Blogging Into a Business

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Men Are From Mars,
Women Are Better Investors
Male Investors: Female Investors:

• Trade more frequently • Trade less frequently


• More prone to • More likely to attribute
overconfidence & gambling success to luck or fate
• Hold more volatile portfolios • Hold less volatile portfolios
• Expect higher than average • Expect lower than average
returns returns
• Act on incomplete • Avoid acting on incomplete
information information

Source: Terrance Odean & Brad Barber


Source: Betterment
Source: Betterment
Shark Week
What is Risk?
Unfortunately, Stocks Go Down
Stocks
Bonds
Cash
Stocks vs. Bonds vs. Cash
Growth of $1, 1926−2016
$100,000

$10,000 $6,031 US Stocks

$1,000

$134 US Bonds
$100
$21 Cash
$10
$13 Inflation (CPI)
$1

$0
1926 1936 1946 1956 1966 1976 1986 1996 2006 2016
Source: DFA
A Walk in the Park
Unfortunate Realities of the
Investment Business
• A talented sales staff will trump a
talented investment staff when
attracting $ from clients

• The products that sound the best are


often the worst ones to invest in

• Clients are often in search of


unrealistic solutions

• Increased activity does not necessarily


lead to better results

• There are no guarantees


What You Want to Hear
“I can give you guaranteed double-digit
returns.”

“Here’s what happens next…”

“Just trust me. I got this.”

“I’ll get you out before the next crash.”

“We’ll give you all of the upside but


none of the downside.”

“It’s a sure thing. You’ll be rich


overnight.”

“There’s no risk involved.”


Everyone Loves a Good Story

We prefer emotional narratives to accurate data

Stories stick with us not statistics


What You Need to Hear
“I’m not sure.”

“We think in terms of probabilities, not


certainties.”

“No one know what’s going to happen to the


markets in the short-term.”

“The great strategy you can’t stick with will


leave you worse off than the good strategy you
can stick with.”

“Saving more money is your best investment


option.”

“Process over outcomes.”


Pessimism Sells…
…While Gradual Improvements
Go Unnoticed
The Change in Emotions
Chauffer Knowledge
Experts
Your Brain on Money
• The brain activity of a person making $ on their
investments is indistinguishable from a person
high on cocaine or morphine

• Financial losses are processed in the same


area of the brain that responds to mortal
danger

• Our brains automatically & unconsciously


expect a 3rd repetition after it sees 2 in-a-row

• The anticipation of a gain evokes a much larger


response than actually receiving the gain

• The bigger the potential gain the greedier you


feel (regardless of how poor the odds might be)
Doing Nothing is a Decision
A Diversity of Opinions

Source: Michael Mauboussin


Source: Michael Mauboussin
The Liberation of Limiting Yourself

Five simple rules from The


White Stripes for their
White Blood Cells album:
1. No blues
2. No guitar solos
3. No slide guitar
4. No covers
5. No bass
The Benefits of Writing
• Writing is not just typing – it’s
thinking, researching & learning
what you really think

• It forces you to streamline your


arguments & principles

• Allows you to educate yourself &


others

• Documents the reasons behind your


decisions
Blogging as a Business?
Personal Brands
Percentage of Affluent Individuals
Who Can Identify a "Favorite Brand"

80%
2007-08 2014-15

67%
61%
58%

47%
40%
37%

28%

Fasion Brand Jewelry Brand Luxury Hotels Retailers

Source: Scott Galloway


The Rise of the Machines
Fending Off the Robots
Successful Investment
Advisors…
…manage investors more than investments.

…understand that the long-term is the only


time horizon that matters but people don’t
live life in the long-term.

...obsess about their clients, not their


competitors.

…speak in plain English to help their clients


understand what’s going on with their money.

…help clients focus on those things that they


control and ignore everything else.
Things You Have
No Control Over
• Tax policy
• Economic growth
• Stock market returns
• When the next bear market
strikes
• The Fed
• Congressional actions
• Interest rates
• The reactions of other
investors
Things You Do Control
• How much money you save
• Having a long-term plan
• Diversifying your assets
• Your asset allocation
• Recognizing your biases
• Investment costs
• What you choose to read/ignore
• Your reactions to market
movements
• Defining your risk profile & time
horizon
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Questions?