Isn’t he beautiful? So cute. We need to start college savings for the son of the institution. What shall we call him?
I often hear that human investors need to be smart, unemotional, and as committed as institutional investors. They should use the same money managers, the same “time-tested” methods as the institutional investor. That way, they will be forced to buy low and sell high. Smart people do it that way.
So, when was the last time your institution gave birth? Had a divorce? Was laid off from work? Had to pay for four years of private college tuition?
People are not institutions! They have specific timelines and unique distribution needs. The institutional method suggests we need to “assess their risk profile.” This requires the prospective investor fill out a multi-page questionnaire identifying how much pain they could tolerate in order to successfully identify someone’s risk profile. I have news for you. Even the compliance officer who demands this document be completed before making any investment recommendations knows full well, this document is flawed from the beginning!!!