On Oct. 31st I hit the 40 year mark working in financial services. I have been a commercial banker, a private equity financier and for the past 25 or so years, a portfolio manager. As an insurance company ad says, I've learned a thing or two because I've seen a thing or two 1/n
I was doing private equity during the DJIA crash in 1987 and bailed out on a cottage purchase I was about to sign that afternoon. I was involved in funding Israeli start-ups in the mid to late '90s when Israel became the country with the 2nd most listings on NASDAQ 2/n
I was a still wet behind the ears money manager when #Nortel became the highest cap company on the Toronto Stock Exchange, and I lost 30% of my client base one month in 2000 because I refused to buy all the dot.com garbage that was making new daily highs. 3/n
When 2008/09 came around our firm was managing over $400 million and we retained over 97% of our clients during what was until then the toughest 8 months of my career. We had a handful of clients who compelled us to cash them out; other than that we did not sell a share. 4/n
And so far we have withstood the COVID-19 pandemic market; we are now managing $1.5 billion, our clients are up for the year to date, and we have lost only one client in 2020. 5/n
So when I see the ads on TV telling young families that I am irrelevant - sneeringly referred to me as "Mom and Dad's guy - you're not still investing with him are you? - I can only wonder how well the "do it yourselfers" who are saving 1% a year are handling their emotions. 6/n
Robots don't hold your hand when the water gets rough. They don't calm you down or talk you off the edge of the cliff. They don't stop you from buying #Tilray at $300/share or from selling #Apple at $53. They have no empathy or emotional intelligence at all. 7/n
It is possible that a few novice investors have the knowledge, discipline and psychological strength to do well by themselves. Good for them. The great majority don't and the myth that saving 1% per year will make them richer is pernicious and will do harm. 8/n
You don't see ads for a guy offering to do your root canal in his kitchen with a Black & Decker hand-held for only $99. There's a reason for that. Like doctors and dentists, financial professionals have years of training and experience. They know things others don't. 9/n
The notion that all that knowledge, experience, and often wisdom, is not worth much is a perfect example of penny wise, pound foolish. Save your 1% a year, but then, like most self-investors, hugely underperform the markets in good times and bad. Your money, your choice
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