Investing is not working as it should for most.
Investment Portfolios are needlessly:
1. Complicated
2. Expensive
3. Inflexible
Here are just a few reasons why:
1. Conflicted Agents. Institutional investment consultants and investment managers have a huge financial incentive to promote expensive, compIicated, inflexible solutions, all the while avoiding accountability for basic investment decisions.
For example, they don’t ask:
“Should I invest in Private Equity?”
Instead, they jump ahead to the question of which fund to pick.
2. Fiduciaries/asset owners are too deferential and trusting of investment managers and consultants. They let it happen.
3. Trustees serving on investment committees often have blind spots; they are often investment professionals themselves. This can seem like an advantage; often it is not. Trustees' role in the financial ecosystem it makes it harder for them to ask the right questions; meanwhile their peer trustees defer to them: they are the experts after all!
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Decisions to invest in complex, inflexible and high cost investment portfolios (typically using Alternative Investments—aka anything not a stock or a bond) should be supported by logic and evidence.
Decision making accountability, especially in relation to investment return expectations- needs to be clearer.
We aim to do more than say that things have gone wrong; we plan on showing examples of how it happens. We hope to engage constructively with others that disagree, and expect to learn more in the process.
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