How do you spell it? “Out-performance” vs. “outperformance”

The browser’s spellchecker keeps tagging “outperformance” as a typo. I feel very annoyed when this happens because I The prefix out- should be united with whatever follows, just as bride and groom should be united.believe it’s wrong. This spurred me to do research on the correctness of my assumption.

The case for “outperformance”

Here’s the evidence in favor of marrying “out” and “performance” so they’re one word:

  1. “Generally do not hyphenate when using a prefix with a word that starts with a consonant,” said The Associated Press Stylebook, when I originally researched this question some years ago. More recently, the online AP Stylebook says, “Follow Webster’s New World College Dictionary.” The dictionary includes “outperform” without a hyphen.
  2. Words into Type says, “The modern tendency is to eliminate the hyphen between a prefix and a root unless the root is a proper noun or adjective, such as un-American.”
  3. I asked, “What would The Wall Street Journal do?” as suggested in my financial jargon killer blog post. At a quick glance, the newspaper appears to favor “outperform.”

The case for “out-performance” with a hyphen

I mustered one piece of  evidence in favor of hyphenating “out-performance” when I originally researched this post. Google yielded more than 931 million search results for “out-performance” vs. only 1.01 million for “outperformance.” It’s strange that the first four results use the spelling “outperformance,” as you see in the screen shot on the left.

I found a similar discrepancy between the number of search results for “outperformance” versus “out-performance” and the spelling in the actual search results when I repeated my search in March 2024. However, the gap between the number of search results shrank to 5.6 million for the hyphenated word versus 5 million for the unhyphenated word.

Results of my spelling poll

When I polled my newsletter and blog readers about the proper spelling, “outperformance” won in a landslide, with 92% of the vote. Here are the results:

  • Outperformance: 92%
  • Out-performance: 0
  • Out performance: 8%



Note: This post was updated again on March 22, 2024. I updated this piece on December 1, 2013, to share the results of my poll, instead of directing readers to a poll that’s no longer active. This post originated as a request for readers to respond to a poll.

CFA Institute Wealth Management Conference 2013 notes

This is my report on information that caught my attention at the CFA Institute Wealth Management Conference. You can also read my post on Scott Welch’s presentation about client reporting or participate in the conversation about how to help clients deal with market volatility.

The Hunt for Yield, the Municipal Bond Market, and Crossover Buyers–Cate Long, founder, Multiple-Markets

  • Muni market changed after bond insurers blew up in 2007, making underlying credit more important.
  • Unfunded pension liabilities now more important to muni bond analysis
  • Puerto Rico is almost locked out of the muni market now. Its bonds are owned heavily by single-state funds because of its special tax status as a commonwealth.
  • Municipal defaults are more common–36 times more common–than reported by rating agencies.
  • EMMA is building a new muni bond market and it’s 10 times better than EDGAR.
  • Social media is bursting with #muniland discussions.

2013 Trust and Estate Update for the United States and Canada

Greg A. Rosica, tax partner, Ernst & Young LLP

  • Advisors, think about ALL taxes, not just income taxes.
  • Interesting factoid: The 35% tax bracket is incredibly narrow for singles–$398,351-$400,000.
  • Estate tax’s portability between spouses is a big plus.

Beth Webel, tax partner, PricewaterhouseCoopers LLP

  • Canadians hit top tax rates really fast.
  • When one spouse is a U.S. citizen and the other is Canadian, taxes are complicated.
  • Gifting asset to Canadian spouse can be advantageous for U.S. spouse.
  • Canada has no gift tax regime, but it has an attribution regime with rules around income splitting.

Current Trends in Single and Multi-Family Offices

Andrew T. Fay, senior vice president, Fidelity Family Office Services

  • About 5,000 family offices exist, many under the radar.
  • “I don’t know one family office that walks dogs.”
  • The average family office fee is 40 basis points on assets under advisement. Fees start at 75 basis points and go down to 25 basis points. But families don’t like fees calculated in basis points, so some family offices are looking to charge flat fees.
  • #1 concern for wealthy family is how to transfer wealth to children and educate them to be socially responsible. Providers aren’t spending enough time on that.
  • Family offices typically don’t have scale to offer everything clients want. Therefore, they are outsourcing where the family doesn’t require control.
  • Family offices haven’t adapted to the mobile/digital style of younger generation. They don’t want paper and they believe in communities, not committees.
  • Investment trends:
    • “Insourcing Private Investments–Outsourcing Public Investments,” which means investing directly in private companies because private equity fees are too rich. Investors take board seats and have a say in the company’s direction.
    • Investors are “barbelling their equity portfolios” for heftier returns. This means  low-beta investing combined with investing in asset classes such as micro caps, small caps, and emerging market stocks.
    • Taking on more risk in fixed income for higher yields.
    • Moving against inflation by minimizing duration to about 2.5 years and investing in asset classes that move up with inflation, such as real estate and broader baskets of commodities.
    • Taking an institutional approach to cash management, laddering it instead of using money markets funds. “Cash management/laddering may offer opportunities for this audience,” said Fay.
  • Look at groups such as the Cleveland Area Family Exchange for your networking and marketing.
  • Look for trusted people in your community who can make your practice more holistic.
  • More family are clubbing up with other families to make direct investments.

Using Digital/Social Platforms in Your Practice Marketing Strategy

April J. Rudin, founder and CEO, The Rudin Group

  • I believe that a video recording of this presentation will be available. Watch for it!
  • You are almost invisible to the next generation if you’re not on social media.
  • Don’t have an intern do your social media.
  • Five years ago, digital social was 19% of marketing spend, now it’s 38%.
  • There’s no more mass marketing. Now it’s targeted.
  • “The person who knows the most about you is Mr. Google.”
  • Video is authentic.

Where Credit Is Due: The Case for Alternative Fixed Income in a Low-Return Environment

John Cashwell, managing director, The Blackstone Group/GSO Capital

  • Investors need to rethink fixed income investing in terms of the need to 1) generate yield, 2) insulate or protect portfolios if interest rates begin to rise suddenly, which would have a prolonged negative impact on portfolios.
  • Consider expanding beyond traditional (core) and extended (core-plus) fixed income strategies to what Cashwell called “alternative credit strategies,” including leveraged loans (also known as senior secured loans), long/short and event-driven credit hedge funds, mezzanine debt, and distressed debt
  • Alternative credit strategies are underexploited, with less than $500 billion in assets under management vs. $2.4 trillion in traditional fixed income and $832 billion in extended credit sectors.

Tax Management of Low-Volatility Portfolios

Paul Bouchey, CFA, managing director of research, Parametric Portfolio Associates, got to something I’d been struggling to explain recently: Why do low-volatility strategies outperform? Bouchey explained it’s because of better compounding for the geometric returns. I wish I could show you his graph.

The Behavior Gap

It’s impossible to do justice in words to this presentation by Carl Richards, founder of The Behavior Gap. For a hint, check out his sketch summarizing the conference’s tax presentation.

Catch the best tweets about the conference

The CFA Institute has collected some of the best tweets about the conference.

Key lesson for investment commentary writers from my professional organizer

My personal possessions aren’t as neatly organized as my writing, so I’ve worked with several professional organizers. They’ve taught me a lesson that is critical for folks who write market, economic, or portfolio commentary: Put like with like.

Just as I should keep my overabundant collection of sweaters in one drawer, rather than scattered over all of my dressers, you should organize your commentary topics in a logical manner. This isn’t easy when you’re an investment professional who is under pressure to churn out commentary at a quarter-end, right when you’re busy with other quarterly tasks.

How does this translate into quarterly commentary? For example, you might separate commentary into sections on the economy, stocks, and bonds. I imagine many of you already do this. However, you can take this one step further.

Use some sort of organizing principle within each section. For example, don’t dump economic statistics in any old order. Consider dividing them into positive and negative indicators, or employment, manufacturing, and income statistics. This kind of organization makes it easier for your reader to grasp your message.

Organize your information well, and you’ll make it as easy for your readers to find your message as it would be for me to find my navy blue cardigan if I divided my sweaters into cardigans vs. pullovers and then sorted them by color.

Your mother and the “fiscal cliff”

Talk to your mother before you use financial vocabulary in your communications. That’s one message I took away from “Guide to the Markets” presented by Andres Garcia-Amaya, a vice president with J.P. Morgan Funds, on September 29, 2012 at FPA Experience 2012 in San Antonio, Texas.

Revealing talk with mom

Garcia-Amaya recalled discussing the “fiscal cliff” with his mother. My paraphrase of his comments follows below.

G-A: Mom, what do you think about the fiscal cliff?

Mom: Oh, it’s so scary.

G-A: Mom, do you know what the fiscal cliff is?

Mom: I have no idea.

Bottom line? Don’t assume your clients and prospects are familiar with financial vocabulary. Test your communications on members of your target audience. Avoid technical terms or explain them briefly.

Market outlook: Risks create opportunities

Garcia-Amaya’s presentation focused on markets, not his mom or communications. He made the point that financial risks and bad news create opportunities for long-term investors because they depress valuations. Also, as Garcia-Amaya noted, $10 trillion is sitting on the sidelines. That’s bigger than the $9.7 trillion size of the entire U.S. mortgage market. When those funds flow back into the market, they should boost prices.

Garcia-Amaya’s current investment preferences include the following:

  • U.S. rather than non-U.S. stocks–“The U.S. is the nicest house in a crummy neighborhood.”
  • Emerging market debt–The emerging markets’ real gross domestic product (GDP) is growing and they have low net debt-to-GDP ratios.

Oct. 7 update: I thought Conrad de Aenlle’s article, “Investors Are Nearing the Edge, Too,” gave a good short explanation of the fiscal cliff: “tax increases and federal spending cuts scheduled for the end of 2012.”

Oct. 10 update: Here’s another plain English explanation. This one is from “The Today Show” with Jean Chatzky. The video clip description refers to “the ‘fiscal cliff,’ a combination of automatic tax increases and spending cuts that could devastate the U.S. economy.”

What about YOU? Do you have a brief explanation that you prefer?

Image courtesy of Sura Nualpradid /

Reader challenge: Your favorite tool for investment commentary?

Investment commentary is a key component of client communications for many asset managers and financial advisors. Having the right tools can make your life easier, so let’s share information about them.

Share your favorite tool below

What’s YOUR favorite tool for creating commentary? Please share your top choice in the comments section below.

Any kind of tool is fine. For example: writing book, commentary template, data source, investment strategist, website, data source, software, or company.

My favorite tool is mind mapping because it helps me organize the information I collect from interviews when I ghostwrite investment commentary. I use mind maps to find and organize the most important information.

I’m looking forward to learning about YOUR favorite tools.

Market commentary with wit and wisdom

Can you recommend sources of market commentary with wit and wisdom? This request from a reader inspired me to ask my social media colleagues for suggestions.

Personally, I enjoy Off the Charts by Floyd Norris in The New York Times. If you’re a longtime reader of this blog, this may not surprise you. I’ve written several blog posts in praise of his writing skill, including “Plain English can bring your financial topic to life.”

Below you’ll find a list of other people’s suggestions. I credit the source in brackets when they gave me permission to name them. Some of the commentaries were recommended by their writers or someone working for their firm.

Still looking for more ideas? Check out the commentaries at Advisor Perspectives. To see what others like, click on the link to the most popular commentaries.

Your suggestions for witty and wise commentary

Did we miss any great sources of market commentary?

Please mention any other great market commentaries in the comments below.

Thank you very much, all of you who so generously contributed to this list.

Image courtesy of Keattikorn/

Poll: When can’t you replace “headwinds” in your commentary?

Is there any time you can’t substitute “challenges” for “headwinds” in investment or economic commentary?

“Headwinds” shows up everywhere in market and economic commentary. I don’t like it because its meaning isn’t clear in the context of commentary. I prefer plainer language, such as “challenges” or “barriers.”

When I posed this question on Twitter, Justin Smith of Jonathan Smith & Co. sent a tongue-in-cheek tweet about one situation in which it’s okay to use headwinds.




What do YOU think about headwinds?

Headwinds has a long history of use in our industry, so I won’t be surprised if many of you vote to continue using it.

Please answer the following question in the poll in the right-hand column of my blog: What is the best substitute for “headwinds” in market or economic commentary?

Your choices include:

  • Barriers
  • Challenges
  • There is no substitute for headwinds
  • (Add your own choice)

I look forward to hearing from you!



Reader challenge: Can you explain duration better than The New York Times?

The duration of a bond isn’t easy to explain in few wordsTiny Yields Pose Risks for Bond Funds. This is why I was delighted by the brief description I found in The New York Times.

Author Carla Fried wrote, “For the most part, managers seem to agree that it is best to limit a fund’s duration, or sensitivity to changes in interest rates. The longer the duration, the more yield you get today, but with the trade-off of a bigger price decline if rates rise.” This paragraph appeared in “Tiny Yields Pose Risks for Bond Funds” on July 8, 2012.

Can YOU explain duration better?

I’m interested in alternative explanations of duration that an ordinary American can understand. Please leave your suggestions below.

Ideal quarterly investment letters: Meaningful, specific, and short

Investment managers’ quarterly investment letters should be meaningful to clients, specific to the manager, and short. These are the key conclusions I drew from my quarterly investment letter survey.

Meaningful content

“Clarity,” “insight,” and “candor” were the most popular answers to the question, “What’s the ONE WORD that best describes what investment managers should strive for in their quarterly letters to clients?” I think these popular answers can be summed up by the term “meaningful content.”

The image below gives a visual overview of the responses. Type size is proportional to the number of respondents choosing a word as their answer.


Here are examples of how respondents explained their word choices.

  • “Clarity” suggests that you have done the reading, research, analysis and due diligence on what you’ve taken in. You have synthesized it. Rather than repeating a litany of what you’ve read, you provide a simple summary of what key points you commend to their attention and why.
  • Clarity. Clients appreciate honesty, and the best way to demonstrate honesty is to be clear in what you are saying. Always consider the client’s perspective. Put yourself in their shoes and ask yourself what is important / relevant, and how you would want it shown. And be honest with your answers.
  • Candid. Warren Buffet discusses both types of investment – the ones that made money and ones where he lost – candidly.
  • Clarity – The world and financial markets are very dynamic, intertwined, and complex. The ability of an investment manager to take seemingly disparate and complex topics and distill them down to an explainable relationship, etc is rare but very value-added.
  • Needs to reflect the voice of the investment team not marketing fluff.
  • Relevance – As a customer, it’s about my money, my future, my family, it’s not about your strategy, your brilliance, your research department. I need to know: Can I count on you?

Content specific to the manager

The survey asked respondents to specify whether various letter components were very important, important, somewhat important, unimportant, or not applicable. Respondents placed the highest importance on the manager’s investment strategy and review of the past quarter’s portfolio performance. Here’s the rank order:

  1. Manager’s investment strategy
  2. Review of the past quarter’s portfolio performance
  3. Manager’s market outlook
  4. Graphs, tables, or other illustrations
  5. Client-specific portfolio returns
  6. Stock-specific or security-specific comments
  7. Sector-level strategy
  8. Review of the past quarter’s market and economy
  9. Something not listed above

These results say to me that readers want content they couldn’t read elsewhere.

Here are some relevant responses:

  • The investments are a commodity…the client bought the firm and that brand should be consistently presented in all interactions.
  • What is missing in the vast majority of reports from managers is any genuine clue as to how and why they made/lost money. Market or asset class reviews or forecasts and returns summaries are ultimately meaningless if the manager doesn’t understand the drivers of his return. I like to see a thorough and genuinely insightful “attributions analysis” that makes it plain to the reader that the manager knows precisely why/how/where the money was made.
  • Needs to be something more than what I get from Bloomberg or WSJ commentary. I want to understand their outlook, and how that shapes their strategy.
  • Manager should include “what went right, what went wrong” during the quarter relative to investment performance. In other words, performance attribution at a high level.

Keep it short

More than 40% of respondents thought a quarterly investment letter should run two pages or less. A length of five pages or more was the least popular response, as you can see in the graph below.

Respondents favor shorter letters that are reader-friendly, as the comments below show.

  • Investors want you to tell them what THEY need to know, not everything YOU know!
  • I read a lot of quarterly letters, and I selfishly would like to be able to pull out the important nugget(s) quickly. More importantly, as an investment advisor I know that my clients will not put a lot of time into reading these letters. If they look long and boring, they simply won’t bother.
  • As an investment manager researcher, I read numerous quarterly commentaries from our sub advisors. The managers that are able to deliver the highlights clearly and in a concise manner stand out because they are better able to communicate their message to me and our clients.
  • In my experience in investment communications, I’ve learned that less can be more. Get to the point quickly! Most financial advisors (and investors) don’t have much time to read and are in a state of information overload. Many receiving a 3-page commentary will put it in their “read later” pile (meaning it may never be read). However, if they received a shorter commentary (1-page would be ideal), they might read it upon receipt, getting information in a much more timely manner.
  • People are busy and finance isn’t always the easiest or most scintillating topic; keep it short and sweet so you can keep your clients engaged and informed, Value their time.
  • After three pages, most people get bored 🙂

Make it personal

It’s not easy to make quarterly letters feel personal and customized without spending lots of time on them. Some of the techniques that respondents suggested for achieving this included:

  • Using “you”
  • Integrating data from portfolio accounting
  • Know the type of client that is attracted to your investment strategy and speak to that client’s biases and need for information.
  • Answer the question, what is in it for them? Comfort them? Encourage them?
  • Add a personal note within the body of the letter. “I took my son shopping for school supplies and Walmart…” and if there is an investment tie-in, so much the better.
  • Include  a personal touch regardless of how long it takes. These clients give us their hard earned money to manage and we should take time to report to them.


A number of comments supported my belief that letters should be well written.

  • I’m busy and I read a lot of investment letters, I don’t have time to reread investment letters in an effort to understand what the manager is really trying to tell me. I want a straightforward letter that I only have to read once to understand.
  • You must write to the level of the average individual, not at a level that will impress your peers. Your clients would not be working with you if they did not believe you are intelligent…you don’t have to show them how intelligent you are by spewing out words that fly over their heads. If you want personalized and relevant letters, you must bring yourself to their level.
  • I try to speak in my natural voice, rather than a “writing” voice. I also find that humor and self-deprecation (on non-professional issues) resonate with clients.

Thank you, CFA Institute LinkedIn Group members and other respondents!

I am very grateful to all of the people who responded. Your comments made this topic come alive. I wish I could have included more of them.

I believe most of the survey respondents are financial or marketing professionals, but I didn’t collect their demographics. However, I suspect that members of two of my LinkedIn Groups–CFA Institute Members and Financial Writing/Marketing Communications–were particularly generous with their contributions.


Note: I edited some of the language for clarity on June 1, 2014.

“The Which Trials” according to “Woe is I”

Woe Is I

If you’ve ever worried whether to use “which” or “that” you’re not alone. It took me years to figure out. However, Patricia O’Connor lays out the rules nicely in “The Which Trials” section of her book, Woe is I: The Grammarphobe’s Guide to Better English in Plain English.

Which vs. that

Here are O’Connor’s rules from page 3 of her book.

  • If you can drop the clause and not lose the point of the sentence, use which. If you can’t, use that.
  • A which clause goes inside commas. A that clause doesn’t.

Investment commentary example

I grabbed a sentence from a John Mauldin commentary to illustrate O’Connor’s rules for using which. In “A Player to Be Named Later,” he wrote, “The carrot is 1% financing for your banks, which can then buy your bonds at 4-5-6% (depending on the country).”

Which is proper in this sentence because the following sentence makes sense: “The carrot is 1% financing for your banks.” Mauldin properly places a comma before the start of the which clause.

Here’s a Mauldin sentence that properly uses that: “Will those lines look like the one that Colonel Travis drew with his sword at the Alamo, where those who crossed and joined him knew their fate?” A sentence consisting only of “Will those lines look like the one?” doesn’t make sense. Thus, that is required.

The first sentence of Mauldin’s commentary requires a judgment call about whether the second clause is essential to the meaning of the sentence. It says, “We have come to the end of yet another European Summit that was supposed to be the one to fix the problem.” The shortened version of the sentence–“We have come to the end of yet another European Summit”–works, suggesting which should replace that. However, it seems important to me that the summit failed to fix the problem. Without that phrase, the meaning of the sentence would change. Thus, it satisfies O’Connor’s stipulation that without the that clause you would “lose the point of the sentence.”

You’ll find more on these rules in “Which Versus That” by Grammar Girl Mignon Fogarty, one of my favorite online grammar resources. For a more technical explanation, see “Introduction and General Usage in Defining Clauses” on the Purdue Online Writing Lab site.

By the way, I wish Mauldin hadn’t capitalized “Summit.” But that’s a whole other issue, which I’ve explored in “Do you use ‘pride capitals’?

Woe is I is a fun read

I recommend O’Connor’s Woe is I as a fun read. Plus, you may learn something from it. I know I did. I’m glad I learned about it from a post on the Copyediting Facebook page.