Insights from the CFA Conference


This week, I was at the CFA Conference in Seattle and thought I would share some of the highlights with you. As is often the case when I attend investment conferences, meetings with speakers and other attendees prevent me attending all the sessions I’d like to get to. But I was able to attend several and heard some insights I think you will be interested in reading about.

Director of investor education at the BAM alliance of financial advisers, Carl Richards, does a great job of conveying complex investment concepts with hand-drawn sketches. He spoke about how to reduce the impact of behavioral errors. He believes investors can realize better returns if they focus on simply avoiding behavioral mistakes instead of focusing on finding above-average investments. Richards thinks the investment community can help by admitting they are part of the problem as well as focusing more on making things simple for investors and on client goals and objectives than creating products investors think they want, but don’t need. He said investors can help themselves by focusing more on achieving personal goals and less on their portfolio performance relative to an index.

A BNY Mellon forum focused on risk management. The discussion was oriented toward institutional investors, but there were two key nuggets of interest to individual investors. The first was an observation of an increased focus on matching assets and asset returns to expected liabilities rather than pegging returns to a benchmark. (In other words, ensure you have enough to fund your future withdrawals, rather than trying to beat the S&P 500.) The second was the danger of alternative investments. They warned that alternative strategies don’t always provide diversification benefits in a crisis, and may in fact go “down in flames at the same time traditional asset classes are struggling.”

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