3 things I'm thinking about this week...

 
1 - Complacency Risk. Think of this as “like for like” risk, our tendency to blindly follow conventional/current thinking. The dictionary definition of complacency is harsher than I would have thought: “self-satisfaction especially when accompanied by unawareness of actual dangers or deficiencies.” Phew! It ties to this Howard Marks quote (passed along by Nick Murray this week): “I’m convinced that everything in investing is counterintuitive, and everything that’s obvious is wrong.”
 
So, what does all of this mean for you? When everyone’s zigging, so to speak, look to see if zagging makes more sense. In buoyant markets it’s time to act deliberately. Being a bit slower to put cash to work, re-examining winners for signs of hairline cracks…etc. Be skeptical during boom times and an enthusiastic buyer during busts. The biggest risk to a stock owner’s fortunes is him or herself. Don’t get lulled to sleep in good times.
 

Photo by Chris Henry on Unsplash

2 - Advisor Alpha. What good does a financial advisor do? How much does their work contribute to improved client outcomes? This is what Vanguard calls “Advisor Alpha.” They’ve analyzed it over the last 25 years – it’s a combination of behavioral coaching, financial planning and investment management that Vanguard’s research says adds “up to or even exceeds 3% in net returns.” It’s my view that behavioral coaching and support is the most vital thing we do for our clients and is something we therefore place great emphasis on.

3 - How I Got My Attention Span Back. Our cat Mali is on a never-ending quest for attention. Her techniques include being nearby and periodically making noise. Smartphones copy her methods…and our constant use of them is well beyond the point of being out of hand. Huge chunks of time and awareness are being claimed by our devices. Is it time to do something about it? This article details the author’s efforts to detach. 3 things she found that helped: Embrace boredom. Remember boredom? Read real books. And develop a long-term phone time reduction plan vs. doing a crash diet of phone abstinence. 

...and one more thing

Test taking and my final two CFA exams happened in Blue Books. Now they’re experiencing a renaissance as the ultimate ChatGPT defense!