What are the “quick wins” for your career and investing?
By Sallie Krawcheck
“Happy” Equal Pay Day, everyone.
Of course, it’s not a happy day.
It’s the day in 2017 that women, on average, have to work until to earn what the guys earned in 2016. It’s even later for women of color and women with disabilities.
So there’s nothing happy about it, of course.
And we have to ask ourselves, in 2017: how is this still a thing? It’s a stark reminder that we women don’t have to work just as hard as the guys; we have to work harder for the same.
Welp, that’s certainly not fair.
But (looking hard for a silver lining here, and likely stretching too far — but stay with me) it does bring to mind that hard work is integral to success. (Did I stretch too far?) Despite all the best-selling books that promise that you can be super-successful or super-wealthy “if only you follow these few simple rules,” I have found few shortcuts or tricks to success.
I would argue that the same is true in investing — there aren’t many shortcuts or fun tricks — successful investing is actually pretty boring, and that’s a good thing. But the belief that there is a “sure thing” or a “better way” persists:
Back when I was running Smith Barney, our team believed they had found an investment with superior returns with less risk. But they were mistaken; there was more risk than they had calculated, and I became the only Wall Street executive to partially reimburse clients for losses. My boss didn’t want to reimburse clients and fired me for it.
The “looking for better returns with less risk” is even more widespread than that: in fact, much of the industry is built around the view that investment managers or financial advisors can outperform the market. That they can turbo-charge returns by buying the right stocks at the right time and then selling them at the right time. Sounds good, right?
But wanna guess the percent of money managers who have accomplished this — who have outperformed the market — over a five-year period?
Well, it’s not half of them. It’s not a quarter of them. Not even 10%. Not even 1%.
It’s less than 0.1%.
No, that’s not a typo. It’s almost nobody. But I guess the allure of this is so great that the industry continues to operate on this premise.
Then came the digital advisors.
And for some of them, their version of this type of shortcut to returns is “automated tax loss harvesting.” Yes, managing investments with taxes in mind is smart. But “guaranteeing” 1% — 2% in additional return…mmmmm…no. Here’s our view on why it’s not what it’s cracked up to be and why you need to read the fine print.
We believe there aren’t any shortcuts in investing…though that isn’t to imply it has to take a ton of your time. You should have a financial plan to guide you to your goals and an inexpensive, broadly diversified investment portfolio that works to get you there. It might sound boring, but the results of it –as you give yourself the opportunity to earn higher returns by investing over the long term, and not just saving — can be life-changing.
This is why choosing an investment firm that is a fiduciary is important. And why choosing one whose principals have deep investing experience — even having picked up a few scars along the way — is too.
The information provided should not be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice.
The information provided does not take into account the specific objectives, financial situation or particular needs of any specific person.
Diversification does not ensure a profit or protect against a loss in a declining market. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.
Investing entails risk including the possible loss of principal and there is no assurance that the investment will provide positive performance over any period of time.