Details Are Part of Our Difference
Embracing the Evidence at Anheuser-Busch – Mid 1980s
529 Best Practices
David Booth on How to Choose an Advisor
The One Minute Audio Clip You Need to Hear
Category: People
The Top 5 Takeaways from Odds On
Dear friends,
It’s been 18 months since the release of Odds On, and every day since then I’ve been amazed and humbled by the response the book has generated. I could tell you some incredible stories about how Odds On is changing people’s lives by opening up the world of evidence-based investing. But the one thing that seems to resonate most with readers is how engaging and accessible the book is—how we’ve managed to humanize a topic that might otherwise seem technical and boring.
That was my goal from the start, but even after publishing the book I’ve wanted to make the lessons of Odds On even more accessible. To that end, I’ve highlighted the most important messages I hoped readers would discover in the book. Whether you’ve read it already and need a quick refresher or haven’t yet picked up a copy and are wondering what it’s all about, here are the key takeaways.
Takeaway #1. The traditional financial services industry (embodied by the giant Wall Street firms) is not about service. Wall Street is a sales machine, focused primarily on making money for itself by pushing actively-managed financial products with high fees that don’t necessarily serve the client’s best interests—or help them achieve their long-term goals.
Takeaway #2. Fortunately, there is a better way to invest. You can adopt an investment philosophy that’s based on logic, data and evidence to put the odds of success on your side. Thanks to smart academic researchers, we now understand where value comes from in the global financial markets (and where it doesn’t), and can put those findings to work in portfolios that offer exposure to the real drivers of long-term performance. In other words, investors can rely on science, not sales pitches and guesswork.
Even more heartening: Our philosophy is rapidly gaining ground against the old, sales-driven model. Just study the money moving each year into passively managed mutual funds and ETFs, as well as the flight from big brokerage houses to independent advisory firms, where true fiduciaries work in the best interest of their clients.
Takeaway #3. While the science is clear, our emotions are complicated. Human nature abhors change, and there is a lot of inertia behind investing behavior—whether we think we have to invest the way our parents and grandparents did or are still hanging on to old notions that “expert” stock pickers have the secret to long-term success. Some people can’t resist the idea that if they just read more articles about the best stocks or mutual funds or spend more time managing their investments, they’ll somehow beat the market.
But at some point you have to understand that evolving to evidence-based investing is not giving up control over your future—you’re actually taking control by accepting the science and embracing the course it lays out for us.
Takeaway #4. Even with academic evidence on your side, the world is unpredictable. Investment returns will fluctuate over time—sometimes painfully (remember 2008?). But you get rewarded precisely for taking those risks. The key to long-term success is not just embracing an evidence-based investment strategy, but staying disciplined and sticking with your plan in the face of short-term uncertainty. If you can’t do it on your own, you can work with someone who helps you stay disciplined. Remember, we’re playing the long game, and investors who are disciplined in the face of short-term chaos are the ones who are most likely to achieve their long-term goals.
Takeaway #5. Evidence-based investing improves your chances of better investment returns, but the greatest return of all is the freedom you gain. Reducing the time you spend obsessing over your investments or worrying about what’s going to happen to the markets tomorrow means you have more time to focus on what really matters to you—all those important things you’re saving and investing for in the first place. It’s liberating.
I hope these highlights have helped you understand a little more about why I wrote the book and what I believe everyone can gain when they embrace a rational, understandable investment approach. And if you or anyone else you know wants a copy of Odds On, just reach out to us by clicking below and we’ll send you one (hardback, kindle or audio). We want to change as many lives as we can, and Odds On has made that journey simpler and faster.
Thanks for taking the long view,
Matt
*All 2017 proceeds from sales of Odds On go to charity.
Apollo Lands at HIG
We were pleased to have Dimensional’s Vice President Apollo Lupescu, PhD at a pair of events we held in Houston and St. Louis. Apollo spoke about the historical context of modern investing, the essence of an evidence-based approach, and the future of our community.
What does history tell us about how the financial future might look? Be on the look-out for a recorded version of Apollo’s St. Louis presentation, which we’ll be sharing soon via our blog/newsletter.
Dimensional Fund Advisors is a hugely important alliance for Hill Investment Group, and yet this is the first event we’ve done with a member of their team conversing directly with HIG’s clients and friends. Despite having a low profile, Dimensional currently manages $518 USD billion across eight countries (as of June 30, 2017). How have they done it? Through sharing ideas that make sense and by creating solutions that reflect their beliefs (and ours).
We also respect Dimensional as a thought leader, regularly publishing content that helps change the way investors think. We like one of their recent pieces, “Lessons for the Next Crisis,” which points out we’re nearing the ten-year anniversary of the beginning of the Great Recession. That’s not exactly an event to celebrate, but it’s important to apply what we learned from it the next time we’re in a bear market, once again feeling like there’s no end in sight. As Dimensional says (and buttresses with evidence-based illustrations):
“Capital markets have rewarded investors over the long term, and having an investment approach you can stick with—especially during tough times—may better prepare you for the next crisis and its aftermath.”
Well said, Dimensional.
St. Louis or Houston? Tooling Around Town
St. Louis or Houston? Places To Go, People To See
We sure had fun last July, sharing some history from Houston and St. Louis. Who knew at the time that Hurricane Harvey was on its way? Today, we’d like to reinforce that we remain as proud as ever of our respective hometowns, where there are still plenty of places to go and things to do when you come visit. Of course, we hope your first stop will be at our local Hill Investment Group office, so we can join you for a personalized tour.
Foodies (Where to even begin?!)
- Houston – Etoile Cuisine et Bar, Café Annie, Tiny Boxwoods, Kiran’s, Pondi Cheri, Local Foods, Southwell’s Burgers, beef BBQ at Roegels, El Tiempo (Matt’s favorite), fajitas at Lupe Tortilla, and many, many, many more.
- St. Louis – Tony’s, Bar Les Freres, Paul Manno’s, Winslow’s Home, Claverach Farms, Truffles, Stone Soup Cottage … let’s not forget BBQ – Sugarfire, Pappys, and Vernon’s.
Outdoor Theater
- St. Louis – The St. Louis Municipal Opera (The Muny) – America’s oldest and largest outdoor theatre. The Muny turns 100 years old in 2018, while its president and CEO Dennis Reagan (our very own John Reagan’s dad!) celebrates his 50th year as a member of the Muny team.
- Houston – The Miller Outdoor Theatre – open year-round due to Houston’s usually mild climate, our treasured venue experienced only minimal damage from Hurricane Harvey.
Parks and Recreation
- Houston – Besides the Miller Outdoor Theatre, Hermann Park is home to the Houston Zoo, several museums, a golf course and plenty of space for hiking, biking or just chilling out.
- St. Louis – Host to the 1904 World’s Fair (with several original structures still intact), Forest Park is the original “Meet me in St. Louis” venue and among the country’s largest urban parks, hosting the Muny, the Saint Louis Zoo, the Saint Louis Art Museum, and so much more.
The Green Scene
- St. Louis – St. Louis is home to the Missouri Botanical Gardens. Established in 1859 as one of the nation’s oldest botanical gardens, it offers stunning public displays, as well as a world-class research library of rare botanical books and specimens.
- Houston – While at Hermann Park, you can take in the formal McGovern Centennial Gardens and an exotic Japanese Garden before skipping over to Memorial Park for a run, a round of golf and a burger at Beck’s Prime.
For the Young or Young at Heart
- Houston – What kid (or inner child) doesn’t get a large charge out of space rockets? Space Center Houston should be just the ticket for the entire family to have a blast in our fair city.
- St. Louis – The name may seem plain, but St. Louis’ City Museum was just voted #1 among Trip.Com’s 2017 Family Tribe Top Attractions. All recycled, all interactive, all imaginative – there’s nowhere else quite like it. (PS: Houston Zoo was voted #5; not too shabby either.)
Batter Up! (St. Louis and Houston)
So, we’ve already mentioned that my HIG colleagues may sometimes sit on opposite sides of the field when the Houston Astros and St. Louis Cardinals face off. But we thought it would be nice to wrap today’s installment by pointing out that our two favorite teams share common ground as well. Most notably, Astros’ current GM Jeff Luhnow came to the team by way of the Cardinals’ administration. And lucky for us, Luhnow is a friend and a fan of Matt Hall’s Odds On, regardless of where he calls home … not unlike all of us here at HIG!
