Barbells

 

The pandemic has reintroduced many of us to barbells.  This week we will discuss how the barbell approach to portfolio construction and our return to the office are similar. Most of the client meetings I attended with wealthy investors ended with a barbell solution.  One end of the barbell was short term cash and the other barbell was what we characterize as alternatives.  Many of the prospective clients made their wealth on the alternative side of the barbell and didn’t trust the volatility of the middle bar of the financial markets.  This belief created a stalemate for most advisors.  It also created an opportunity for ETFs and Ashvin Chhabra.  

Discrimination 

Wealth management seems like it is discriminating against all “other wealth”.  Many firms take this discrimination a step further by establishing account minimums.  My hope is we can provide wealth advisory services to all.  Our challenge is what is our time worth and how long it takes to provide our services.  Discrimination is prevalent in our society and shouldn’t bleed over into your wealth advisory firm.  Discrimination is like Porn - we know it when we see it.  Please don’t discriminate among your clients and colleagues.  

Start 

It seems like numerous “experts” are signaling the end of the pandemic. Who should we listen to for the start gun?  My bias is to listen to the numerous starters who have a track record of success telling us it is safe to go back into the pool. Unfortunately, this time will be different which leads us back to ourselves. There isn’t a definite answer but the status quo isn’t a good solution either. We need to take the approach of VC’s and make a small investment, but be willing to pivot if our approach isn’t  working. The last important thing we can do is to start. We might belly flop but at least we are in the water again. 

Improved Approach 

Our improved approach post pandemic is scary. Hopefully you will wear a mask and any mistakes won’t be fatal. Our improved approach needs to look at our business pre-pandemic and solve the problems that always frustrated us. The post pandemic approach is like a mulligan in golf. A mulligan is a benefit if we we use it correctly. My best mulligans are after horrible shots.  We need to analyze our business and identify our obvious mistakes so that our improved approach will be successful . Mulligans are a horrible thing to waste. I recommend changing clubs with a subscription fee schedule and swinging easy. 

We have a once in a lifetime opportunity. Hopefully we take advantage and use the lighter barbell.