First, some recent history. Over the past 15 years it was best to be in stocks over bonds, U.S. stocks over international, growth over value, and large over small.
If history teaches us anything, it’s that change is the only constant. The winners of the past are not necessarily the winners of the future, and usually aren’t. So we should expect the winning investments over the next 15 years will be different from the past 15 years.
For this very reason, professionally managed money is the way to go. Whether it’s called Mutual Funds, or Managed Portfolios, or Private Investment Pools, or a number of new investment vehicles being developed, you simply cannot beat Portfolio Managers working with a team of Investment Analysts.
At Bluestone Financial we spend our time looking for top Portfolio Managers, with proven track records, and we invest with them.
Every day they are busy doing research, thinking strategy, making adjustments, reallocating capital; investing unitholders’ money where the risk isn’t high, where the holdings are top quality, and the potential gain is promising. And very often they have their own personal money invested alongside ours (something we specifically look for in a Portfolio Manager).
This is quite different than investing in ETFs, Exchange Traded Funds. ETFs are a fixed investment in a portfolio reflecting the whole market, or a fixed investment reflecting a certain sector or asset class. The strategy and holdings are not adjusted to be in line with changing circumstances. There isn’t a professional money manager changing tactics and reallocating capital.
ETF investors are banking on the winners of the future being the same as the winners of the past. And that’s the point. History has taught us that change is the only constant. The winners of the past are seldom the winners of the future. Or, to put it in the oft quoted warning, “past performance is no indication of future performance.”
For our money, and our clients’ money, we want to “skate to where the puck is going to be, not where it has been.” This may very well be the single most important argument for professional money management.
You simply cannot beat “managed money” for financial security and financial peace of mind.
