Another great video nugget from the Manual of Ideas – this one has Broyhill Asset Management’s CIO Christopher Pavese explaining how bending to the will of clients has an adverse impact on investment results.
I know from experience that whenever you start hearing from investors about how terrible an underperforming asset class is (EM stocks these days), that’s when you’re really close to a bottom. In our strategic asset allocation portfolios, we do not permit “a la carte investing” in general because if left unchecked, investor portfolios will always end up loaded with the sectors or asset classes that have already had a monster run and devoid of those that are about to outperform in the future.
Professional investing, over the long-term, means having to look stupid in the short-run. It also means talking investors out of driving in the rear-view mirror.