Excuse the clichéd stock image for the topic at hand.
An interesting article appeared at RIA Intel discussing “smart, young, high-earners who can be more exacting in their wishes.”
Take, for example, Elizabeth (who wished to remain anonymous), a 36-year-old single physician in New York City who has considered hiring an advisor but so far hasn’t. Her major concern is she feels that most advisors offer a cookie-cutter approach: a diverse blend of stocks and bonds.
There’s a common belief that medical professionals are terrible investors. This may get to the heart of why.
Elizabeth is a high achiever. She wants that to extend to every area of her life. Including investing. Not happy with saving and getting the market return, something that will likely put her ahead of most other investors, she wants more. The mindset of where she got today, hard work and pushing for more won’t guarantee any performance benefits when investing.
She wants to shoot the lights out, or at least feel she is. It may make her the target of a scam artist. Alternatively she’s going to waste time, energy and money chasing her tail or bouncing between advisers who won’t live up to her expectations. This will increase her frustration. Sooner or later advisers will all be idiots who did nothing but continually waste her time and money.
No sane adviser should waste their time taking Elizabeth on. She will only prove to be more trouble than she’s worth.
When I wrote the Lance Armstrong post, I didn’t know when it might come in handy, if at all, but now it seems clear what the value is. I’m not going to add in another Armstrong disclaimer. Lance Armstrong was a type A personality and a high achiever, but in the dirtiest of sports he also managed to recognise he needed to do exactly as Michele Ferrari said to achieve his goals.
Of course he wasn’t beyond questioning Ferarri.
Armstrong: “Whatever he said, I did. To the word. Cause we would ask, you know, oh I heard someone was doing this! Or I heard someone was doing that! Should we think about that?”
Ferrari: “Lance, all you need is red cells.”
Elizabeth is interviewing advisers with a specific expectation on returns. Goals appear to be absent from Elizabeth’s interests and concerns. This highlights the space between what people believe advisers do and what advisers actually do. Investing often has the sole focus, but it is far from the sole outcome. Worse, unlike Lance, Elizabeth isn’t willing to listen.
One day, Elizabeth may have a revelation. It’s likely to come after a futile pursuit of performance.
This represents general information only. Before making any financial or investment decisions, I suggest you consult a financial planner to take into account your personal investment objectives, financial situation and individual needs. Don’t make financial or investment decisions on the basis of blog post or sourcing advice from internet forums, if you’d like a introduction to investing, please consider reading Your Investment Philosophy, which offers an evidence based primer for building your own investment philosophy.
