#2 August 2019

Uncertainty

It appears as though we are, once again, living through a period in which multiple crises are weighing down on us. In the UK, we have a new resident in Downing Street. In the US, an upcoming election while the 2016 result is still being fought over by a media not wanting to move on. Trouble in Hong Kong.

A period of extreme uncertainty.

We know that the market-focused advisor is trying to appease his/her clients' demand for certainty, searching for any forecast that suggests all is fine.

But you, dear reader, understand that we do not move from periods of uncertainty to periods of certainty. No. You understand that as a world we move from crisis to panic and back to crisis, this is the modern media cycle (A line the media would never say - "we're now entering a period of certainty or extreme certainty"). You know that uncertainty is the only certainty.

In "The Devil's Financial Dictionary" Jason Zweig defines certainty as "an imaginary state of clarity and predictability in economic and geopolitical affairs that all investors say is indispensable—even though it doesn't exist, never has and never will. Uncertainty is the only condition investors ever have faced, or ever will, from the moment barley and sesame first began trading in ancient Mesopotamia to the last trade that will ever take place on Planet Earth. "

And so, we cling to our conviction that the value we bring to clients is not our ability to provide certainty, but our ability to help clients tolerate ambiguity and behave in line with the plan that is likely to deliver the goals they have set out.

When we look to history as our guide (which is our only guide), we see that optimism, patience and discipline have been rewarded by the market, and so we stand firm.

 
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Articles and Blogs

How Dan Ariely Sees the Future of Financial Advice [7 minutes]. "He cared about me holistically and discussed what kinds of things gave me happiness. It was great."

Today vs Tomorrowland [5 minutes]. It’s an ongoing balancing act.

Where the magic happens [4 minutes]. Combine top-notch financial planning with behavioural coaching, this is where the gold dust is.

How to Talk About Money [19 minutes]. The next time it comes up, you may even enjoy the conversation.

Worrying About the Wrong Risk [3 minutes]. Our brains are hardwired to identify immediate risks, not long-term ones.

The Financial Upside of Being an Optimist [4 minutes]. Optimism is a lucrative investment.

 The Price of Admission [5 minutes]. Why avoiding volatility can be worse than stomaching it.

 Managing Investor Emotions: How to Talk About Behavioral Coaching With Your Clients [2 minutes]. Subtle rephrasing can help investors better understand the value of behavioral coaching.

Embrace the Uncertainty [2 minutes]. In order to accomplish anything worthwhile, you must be willing to be vulnerable.

Calling at all stations: tube passengers to get 4G reception from next year[2 minutes]. When we thought the tube was a place we could escape smartphone addiction 🙁


Podcasts

Charlie Munger joins Influencers with Andy Serwer [43 minutes]. A brilliant insight into a brilliant mind.

Rick Ferri: 'There Are No Average Investors' [48 minutes]. The evolution of adviser value.


Book Recommendations

Alchemy: The Surprising Power of Ideas That Don't Make Sense (Rory Sutherland). The Ogilvy advertising legend explores the art and science of conjuring irresistible products and ideas.

Amazing Decisions: The Illustrated Guide to Improving Business Deals and Family Meals (Dan Ariely). An easy-to-read graphic novel exploring the messy intersection of market and social norms.


Other

JP Morgan: Guide to the Markets. A treasure trove of data in simple graphics.


Videos

 
 

How The Economic Machine Works by Ray Dalio [31 minutes]Economics 101.

 
 

Celeste Headlee: 10 ways to have a better conversation [12 minutes]. Honesty, brevity, clarity and a healthy amount of listening.

 
 

Rob Caplan: Things Are Not Always What They Seem (HUM London 2018) [23 minutes]. The intelligence of few perceives what has been carefully hidden.