When the stock market hit a recent low last week, my college-age daughter who is new to investing (thanks to the Robin Hood app) asked me what stocks I would recommend. She already knows that dips are buying opportunities, and she should buy low, sell high. After dismissing my suggestion that she consider buying an S&P 500 fund (“too boring,” she told me. “That’s the point!” I told her), I suggested two stocks: Netflix and Apple. She bought them immediately.
Apple announced impressive earnings Thursday. The stock has increased nearly 10% in the two trading days since.
Netflix, which had cratered 36% over the past several weeks, down this year from a high of $700.99 to a low of $351.46, shot up more than 11% on Monday.
My daughter told me that all of her friends now consider me a stock-picking genius. I laughed. I’m hardly that. But I have had some success over the years in investments by applying my most salient personal traits to my investment life: I’m cheap, lazy, and boring. If you apply these three traits to buying stocks, you’ll be surprised how well you’ll do.
Netflix is a great example. I have long wanted to own Netflix, ever since I noticed my 80-year-old mother figuring out how to stick with the brand as it moved from shipping DVDs to streaming. A brand has to be powerful to get someone as technically illiterate as my mom to use their technology. But, since I’m lazy, I never picked up the phone, called my broker, and ordered it.
Yes. I still call my broker when I want to buy a stock. You’d be surprised how that small barrier to entry, both the fee and the action of picking up the phone, keeps you from buying stupid stuff that you shouldn’t even consider. Hello—Gamestop?
But, as I mentioned, I was too lazy, so I watched from the sidelines and Netflix took over streaming and, during the pandemic, essentially the world. The stock skyrocketed. But when COVID-19 mutated from pandemic to endemic, which meant that we’d need to start venturing away from our couches at some point, subscriptions slowed, profits dipped, Wall Street freaked out and the stock plunged. I finally had the incentive I needed to add the stock to my portfolio. I called my broker and bought.
I don’t really care if Netflix stock rises anytime soon. I just know the brand has value. I’ve noticed that when I help my kids or in-laws set up their smart TVs, the first thing they want to know is how to sign in to Netflix. They ask that the Netflix tile be placed first on their home screen, usually followed by HBO Max.
No one ever says “Hulu and chill,” and even if they did, Hulu is owned by Disney and Comcast, so you can’t invest directly.
I’m so lazy that it took a crash for me to buy Netflix. And because I’m cheap, I felt pretty confident about the purchase. I essentially got a share and a half for the price of one. I have no idea if Netflix will figure out the challenge of slowing subscriptions. I don’t have intimate knowledge of the company’s balance sheet. But I took a quick look at the price to earnings ratio—down to nearly 30 at the time I purchased, which is about all the due diligence I ever do, and that was good enough for me.
Now I’ll apply the third attribute to my “cheap, lazy and boring” investment strategy and hold the stock forever. Being boring is probably the most important part of successful long-term investing. Buying and holding a stock that you’ve vetted is a superpower. You don’t have to think about it at all. When it goes up a lot, you momentarily feel like a genius. When it plunges, you feel a little less smart, but you might also get the kick you need to buy more.
You don’t need to worry about how your portfolio does day to day because you were too lazy to buy stocks you didn’t believe in.
Being cheap, lazy, and boring allows you to make some extraordinary investments. I bought Amazon stock in the 1990s because I was tired of my friends who worked there (I live in Seattle) bragging about how rich they were going to be one day. Trying to shut up your friends isn’t the best method for buying a stock, but because I’m boring, I held on to the stock ever since, which now makes me an investing genius. Meanwhile, my friends left the company long before their options vested because it was not a very fun place to work.
If I ever buy crypto, it will be for a similar reason, to get my friends to stop bragging about their genius investments and to just get them to shut up. But right now, I’m too lazy.
I’m sure Apple and Netflix will come back down to earth in the near future. That’s fine. They’re great brands with strong management that have impressive track records. I’m not too worried about their long-term prospects. Besides, I’m too cheap, lazy, and boring to do anything about it even if I wanted to. But in the meantime, for a few days anyway, I’ll take the moniker of investment genius. After all, I’ve earned it.
Indigenous-led Winnipeg organizations' $620M investment plan proposes new hospital, housing – CBC.ca
A hospital for Indigenous people and hundreds of new housing units are among the spending priorities laid out in an investment plan released Wednesday by a coalition of Indigenous-led organizations in Winnipeg.
The Winnipeg Indigenous Executive Circle — a coalition of 32 member organizations that work to support Winnipeg’s Indigenous population — is proposing a 10-year, $620-million spending plan, which it believes will make Winnipeg a better, healthier place for its communities.
“It’s essentially just laying out … in dollar terms, where we need help and where we see funding gaps that we need to actually hit these objectives,” co-chair Kendall Joiner said at at the Neeginan Centre on Higgins Avenue, where the plan was unveiled on Wednesday.
Spending proposals are broken down into four priority areas: health and well-being, housing and homelessness prevention, supports for families, and employment and education.
One of the big-ticket items in the plan is a hospital specifically serving Indigenous people, estimated to cost $65 million.
The plan also calls for a commitment to build hundreds of new housing units, including supportive housing and units with rent geared to income, expected to cost at least $347 million.
Other priorities include $1 million for cultural programming through the Winnipeg Indigenous Friendship Centre and $1.2 million for the creation of Indigenous research institutes.
Leaders of the Winnipeg Indigenous Executive Circle — whose membership includes organizations like Ma Mawi Wi Chi Itata Centre, End Homelessness Winnipeg and the Eagle Urban Transition Centre — say the goals in the plan would promote and elevate the work Indigenous-led groups are already doing.
“We’re a community that’s always been told, ‘this is what you need to do to move forward,'” said Crystal Laborero, chief executive officer of the coalition group.
“I think we’re in a day and a time that we are now realizing that … we have a lot of leaders in the community that are looking to make change for the urban Indigenous community and we have the solutions. We’re the experts in our field, so we feel that we can do this.”
The coalition says the plan shows governments and donors exactly what it would take to make Winnipeg a more welcoming and safer place for people who are First Nations, Métis and Inuit.
Success will be measured not by dollar value, but by how willing governments are to come to the table as equals, and how willing they are to understand that the Indigenous-led groups that make up the coalition know exactly what their communities need, the Winnipeg Indigenous Executive Circle said.
Credit Suisse Nabs Truist's Wolfgram for Tech Investment Banking – BNN
(Bloomberg) — Credit Suisse Group AG hired Rick Wolfgram as a managing director within its technology investment-banking group.
Wolfgram, who’s based in San Francisco, will report to Brian Gudofsky, the Swiss lender’s global head of technology investment banking, according to a memo to staff seen by Bloomberg News. A spokesman confirmed the memo’s contents, declining to comment further.
Wolfgram was most recently a managing director at Truist Financial Corp., where he led internet and digital media investment banking. He’s worked on transactions including initial public offerings for Coursera Inc., DoubleVerify Holdings Inc., NerdWallet Inc., Udemy Inc. and Snap Inc., as well as a high-yield offering for Cars.com Inc., Gudofsky said in his memo. Wolfgram joined Truist in 2012 after working at ThinkEquity.
Earlier this month, David Miller, Credit Suisse’s global head of investment banking and capital markets, said the Zurich-based firm plans to hire roughly 40 managing directors as part of its broader effort to rebuild.
©2022 Bloomberg L.P.
As Markets Tumble, Financial Advisors Rethink Growth Prospects, Finds Natixis Investment Managers 2022 Survey of Financial Professionals
- Canadian financial advisors look for double-digit growth in their business, primarily driven by new assets from new clients.
- Vast majority of client assets are now in model portfolios as focus of wealth management business transitions from portfolio management to holistic financial planning.
- Advisors see generational wealth transfer as crucial to business success, but only one-third prioritize next-generation heirs as new business targets.
BOSTON–(BUSINESS WIRE)–Financial advisors are looking to increase client assets under management (AUM) by 5% (median) this year, and with little of that likely to come from market performance, they are counting primarily on new assets from new clients to grow their business, according to findings from Natixis Investment Managers (IM) 2022 Survey of Financial Professionals, published today.
Natixis IM surveyed 150 financial advisors across Canada, as part of a larger global survey of 2,700 financial professionals. The Canadian findings presented here provide insight about advisors’ growth strategies, the challenges they face, and how they are adapting their business to changes in the market.
Over the next three years, financial advisors are targeting a median annualized growth rate in AUM of 15% and 10 new clients per year. While the long bull market helped turbo charge asset growth over the past ten years, advisors aren’t counting on double-digit returns over the long term. Rather, the survey suggests that advisors are looking to catch a tailwind from the vast amount of money in motion, including rollover retirement assets and the transfer of significant generational wealth. Many may be hard-pressed to hit their targets unless they also adapt their business practices and assumptions.
The survey found:
- Client acquisition is the most difficult way for advisors to go about growing their business. When asked which business growth strategy is most challenging, they were two times more likely to say winning new assets from new clients (45%) than gaining more assets from existing clients (20%). Nearly one in three (29%) say retaining clients is most challenging.
- 65% of advisors say that establishing relationships with clients’ next-generation heirs is the most important factor for the growth of their business, yet 50% say it’s difficult to make progress at it since it takes so much time.
- 59% say that demonstrating their value beyond portfolio construction is one of the most important factors for their success, but 42% say it’s challenging because of the time needed to deliver a broader range of advice and services.
“Advisors have to expand their capacity to grow their business while meeting the needs of new and existing clients,” said David Giunta, President and Chief Executive Officer for the U.S. at Natixis Investment Managers. “Advisory relationships are no longer defined by transactions in an investment portfolio, but rather by a deeper understanding of clients’ financial needs and the services they feel add the most value for the money. Technology and product innovation are helping advisors deliver the consistent investment experience clients expect while supporting the transition of their business to a broader focus on financial planning.”
Modeling the business for new clients
One key way advisors are expanding their capacity on the planning side is by using model portfolios on the investing side. On average, 84% of client assets under management are in model portfolios, including 47% of assets in models that advisors build themselves, 29% in models built and managed by their firm, and 23% from third-party asset managers.
The survey found:
- 83% of financial advisors find that financial planning services are what clients whose assets are in model portfolios value most about the relationship, followed by tax management (60%), financial education and engagement with family members (51%), and trust and estate planning services (50%).
- Among the small percentage (16%) of advisors who don’t use model portfolios, half (54%) say that personally building clients’ investment portfolios is essential to their value proposition.
“The actively-managed, risk-adjusted performance features inherent in model portfolios make them particularly compelling in the current market environment,” said Marina Gross, Co-Head of Natixis Investment Managers Solutions. “Our portfolio consulting practice shows that core moderate-risk model portfolios consistently deliver higher risk-adjusted returns with less volatility than the broad market, enabling advisors to focus more time on long-term goals, than short-term performance.”
The survey found the most effective ways financial advisors are incorporating model portfolios into their practice are by:
- Transitioning assets on a case-by-case basis, depending on each client’s willingness (65%)
- Focusing on new assets from new clients (39%)
- Transitioning client assets in phases, eventually moving the entire client base into model portfolios over time (34%)
About one in three advisors (29%) have found it effective to focus their use of model portfolios on retirement drawdown clients, while one in four (25%) say it was best to take the plunge and move their entire book of business into model portfolios all at once. Few have found it particularly effective to reserve their use of model portfolios for clients who represent less revenue potential, including clients with lower balances (15%) and younger clients (12%).
Prospecting efforts come into focus
In their search for new clients, financial advisors are looking in all the usual places, with most (77%) considering the life stages of their prospects. Almost all advisors (98%) say that pre-retirees, or people between the ages of 50 and 60, are their top priority, while 64% focus on prospects who are at or just entering retirement. Seven in ten (70%) prioritize older accumulators, or people between the ages of 35 and 50 who are in their peak earning years and likely in need of comprehensive financial services to address multiple financial goals such as saving for retirement, funding education, and managing debt.
Given the market environment and generational transfer of wealth underway, advisors may be missing opportunities to reach the oldest and youngest group of potential clients.
- Only 33% of financial advisors are focused on post-retirees, many of who are drawing down versus accumulating assets but who still need robust financial planning and advice to protect, use and pass on their assets.
- 34% place a high priority on prospecting for clients between the ages of 18 and 35, members of Generations Y and Z, who represent the fastest-growing segments of Canada’s population1.
Beyond age segmentation, advisors are tailoring their business offering and business development strategies to appeal to specific high-valued groups. When asked which segments they are prioritizing for client acquisition and retention, the survey found that, again, advisors might be overlooking opportunities to meet the distinct needs of certain segments, namely women and the LGBT+ community. Moreover, relatively few are targeting next-generation heirs despite their importance to the success of their business.
The survey found:
- 83% of advisors are focused on professionals, such as lawyers, doctors, and corporate executives and nearly as many (75%) are targeting business owners
- 75% are focused on HENRYs (High Earners, Not Rich Yet)
- 35% prioritize next-generation heirs
- 29% are concentrating on the needs of women
- 4% are focused on the LGBTQ community
Natixis Investment Manager’s global report on the findings of its 2022 survey of Financial Advisors can be found here.
1 Statistics Canada, Census of Population, 2021, reported in A generational portrait of Canada’s aging population from the 2021 Census, released April 27, 2022.
Natixis Investment Managers surveyed 150 financial advisors across Canada, as part of a larger global survey of 2,700 financial professionals in 16 countries. Data were gathered in March and April 2022 by the research firm CoreData with additional analysis conducted by the Natixis Center for Investor Insights.
About the Natixis Center for Investor Insight
The Natixis Center for Investor Insight is a global research initiative focused on the critical issues shaping today’s investment landscape. The Center examines sentiment and behavior, market outlooks and trends, and risk perceptions of institutional investors, financial professionals and individuals around the world. Our goal is to fuel a more substantive discussion of issues with a 360° view of markets and insightful analysis of investment trends.
About Natixis Investment Managers
Natixis Investment Managers’ multi-affiliate approach connects clients to the independent thinking and focused expertise of more than 20 active managers. Ranked among the world’s largest asset managers1 with more than $1.3 trillion assets under management2 (€1.2 trillion), Natixis Investment Managers delivers a diverse range of solutions across asset classes, styles, and vehicles, including innovative environmental, social, and governance (ESG) strategies and products dedicated to advancing sustainable finance. The firm partners with clients in order to understand their unique needs and provide insights and investment solutions tailored to their long-term goals.
Headquartered in Paris and Boston, Natixis Investment Managers is part of the Global Financial Services division of Groupe BPCE, the second-largest banking group in France through the Banque Populaire and Caisse d’Epargne retail networks. Natixis Investment Managers’ affiliated investment management firms include AEW; AlphaSimplex Group; DNCA Investments;3 Dorval Asset Management; Flexstone Partners; Gateway Investment Advisers; Harris Associates; Investors Mutual Limited; Loomis, Sayles & Company; Mirova; MV Credit; Naxicap Partners; Ossiam; Ostrum Asset Management; Seeyond; Seventure Partners; Thematics Asset Management; Vauban Infrastructure Partners; Vaughan Nelson Investment Management; and WCM Investment Management. Additionally, investment solutions are offered through Natixis Investment Managers Solutions and Natixis Advisors, LLC. Not all offerings are available in all jurisdictions. For additional information, please visit Natixis Investment Managers’ website at im.natixis.com | LinkedIn: linkedin.com/company/natixis-investment-managers.
Natixis Investment Managers’ distribution and service groups include Natixis Distribution, LLC, a limited purpose broker-dealer and the distributor of various U.S. registered investment companies for which advisory services are provided by affiliated firms of Natixis Investment Managers, Natixis Investment Managers S.A. (Luxembourg), Natixis Investment Managers International (France), and their affiliated distribution and service entities in Europe and Asia.
1 Cerulli Quantitative Update: Global Markets 2021 ranked Natixis Investment Managers as the 15th largest asset manager in the world based on assets under management as of December 31, 2020.entities measured as of March 31, 2022 are $1,320.6 billion (€1,187.6 billion). AUM, as reported, may include notional assets, assets serviced, gross assets, assets of minority-owned affiliated entities and other types of non-regulatory AUM managed or serviced by firms affiliated with Natixis Investment Managers. 3 A brand of DNCA Finance.2 Assets under management (“AUM”) of current affiliated
This material is provided for informational purposes only and should not be construed as investment advice. There can be no assurance that developments will transpire as forecasted.
The data shown represents the opinion of those surveyed, and may change based on market and other conditions. It should not be construed as investment advice.
All investing involves risk, including the risk of loss. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
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