“ADVICE” ON EMERGING MARKETS: IT MUST HAVE SOUNDED BETTER IN A BROADER CONTEXT

8/19/13

My wife Susan is a nurse by training, education, and experience and a nurse educator by profession; she has about as much interest in investing as I do in nursing, an amount more or less asymptotic to zero.  I depend on her to address our family’s medical needs, among other things, and she depends on me to take care of the family’s finances, among other things.  It’s a partnership that has worked well for the last twenty five years.

Earlier today, Susan and I happened to be in the same room when the Noon Business Hour (“NBH”) on WBBM Newsradio in Chicago was being broadcast.  As you might guess, I am a big fan of WBBM and perhaps especially of its excellent Noon Business Hour.   Sue listens when it’s on, but wouldn’t specifically tune to the show.  Something really caught her ear today, though.

The NBH’s very capable hosts, Kris Kridel and Sherman Kaplan, were interviewing an earnest sounding portfolio manager/financial advisor from someplace in Virginia.  I can remember neither his name nor his employer, which is a good thing for purposes of this post.   The wide ranging interview got around to emerging markets, an area of interest to me both from an intellectual standpoint and because we have a slightly disproportionately large percentage of the family assets in emerging market index funds.  When Mr. Kaplan and Ms. Kridel asked this guest about the advisability of the typical investor’s putting money into emerging markets, the guest replied with…

“Sometimes these markets do well, sometimes they don’t do well.”

That got my wife’s attention.   “Did that guy just say what I thought he said?” she asked me.

“Yes he did.”

“Sometimes these markets do well and sometimes they don’t do well?”

“Yes, that’s what he said.   And he probably gets paid very well for exuding such brilliance.”

“Gee,” Susan replied, “I ought to get into that business!”

In my now seminal piece of 8/19/13, EXOTIC INVESTMENT PRODUCTS FOR THE “AVERAGE GUY”:   WHAT’S THE POINT?, I stated

Trust and honesty are far more important characteristics for a financial advisor than are purported investment skill and knowledge.

But let’s at least hope that, if you choose to work with a financial advisor, s/he can offer more searing insight than

“Sometimes these markets do well, sometimes they don’t do well.”