Tag Archive for: investment commentary

ESG opinions can enliven your commentary

ESG investing is hot. More and more individual and institutional investors are considering companies’ strength in terms of their environmental, social, and corporate governance characteristics. This is a topic you might want to discuss in your client communications.

Which Corporate ESG News Does the Market React To?” (membership required to view complete text) is a 2022 Financial Analysts Journal article that can spark some ideas for your commentary. The article suggests that investors respond to unexpected news and that “investors are motivated by financial rather than nonpecuniary motive as they differentiate in their reactions based on whether the news is likely to affect fundamentals.” Also, “This price reaction is larger for ESG news that is positive, receives more news coverage, and relates to social capital issues relative to natural or human capital issues.”

You can start your discussion by using the techniques I originally discussed in “Investment commentary topic: ETF controversy.” (See “3 ways you can use a Financial Analysts Journal article for investment commentary” image below.)

3 ways you can use a Financial Analysts Journal article for investment commentary

1. Discuss  whatever this article makes you think about

You can run with the questions suggested to you by the article. If you have opinions about ESG-related drivers of stock prices, share ’em.

Or, use the article to spur your discussion of ESG-related issues that don’t necessarily relate to stock prices. Perhaps you think it’s far more important to look at the impact of your stock choices on ESG-related corporate activities and social justice than to understand what moves stock prices. It’s helpful for your clients and prospects to know if you think, “Who cares what drives stock prices? We need to save the world.”

2. Discuss why the article is right about ESG investing

You can go deeper than the article, or you can explain how it applies to the investments your firm uses.

If you’ve observed the phenomena discussed in the article in specific stocks or industries, that makes for an interesting story that gives insights into your approach to investing. Of course, make sure your firm’s compliance professionals approve (and provide appropriate disclosures) for any discussion of specific stocks. Also, don’t cherry-pick only positive examples of your firm’s analysis (or use appropriate disclosures if you only discuss positive examples).

If your firm invests in funds that are adept at using positive ESG-related news in their stock selection, that’s another good topic for your client communications.

3. Disagree with the article

If you discover flaws in the authors’ arguments, identify those flaws and say why they should matter to your clients.

Your ability to evaluate information critically is important to your clients. That’s especially true when you tie your analysis to its impact on your clients’ WIIFM (what’s in it for me).

Credit your source for this ESG topic

You must credit the Financial Analysts Journal article as your source. That’s especially true if you cite data from it. But mention it even if it was merely the article title that sparked your ideas. Your clients and prospects like to know that you read reputable sources of research to stay up on investing.

 

 

 

Why I write for you

You can reach more clients and prospects when you put your useful ideas into writing. However, many investment and wealth managers lack the time—or maybe the skill—to put ideas into writing persuasively. That means your audience loses an opportunity to benefit from your expertise.

When your writing isn’t as strong as your ideas, you may gain from a good editor or writer with industry knowledge to shape your ideas into compelling prose.

Why I write for you infographic

 

While you may get your thrills from helping your clients reach their financial goals, mine come from cracking the mystery of how to communicate your information persuasively. I’ve developed my skill through a variety of experiences.

  • As  a writer-editor for leading investment and wealth management firms and former director of investment communications at Columbia Management, I understand your industry and your vocabulary. Between real-life experience and the studies that led to earning my CFA charter, I know that if you talk about a bond’s “duration,” I must translate that into simpler language for the average investor.
  • As editor of the NAPFA Advisor, a monthly publication for financial advisors, I know how to communicate with that audience, which may be an important target for you.
  • As a former reporter for a weekly mutual fund publication, I know that you’ve got to grab your reader’s attention at the beginning of your story. I’ll question you until I understand your “hook.” I also understand the importance of deadlines.
  • As a corporate trainer and public speaker, I’ve developed the ability to help you become a better writer and editor. It has been exciting to speak across North America on “How to Write Investment Commentary People Will Read” for the CFA Institute and about “Writing Effective Emails ” for chapters of the Financial Planning Association. I’ve captured many of my techniques in my book, Financial Blogging: How to Write Powerful Posts That Attract Clients.

Thank you for giving me the opportunity to enjoy helping you!

 

 

Note: This post was originally published in September 2009 and updated in June 2014 and November 2021.

Investment commentary topic: ETF controversy

Are you tired of only discussing recent market developments in your investment commentary? Look to your professional reading for ideas, as I suggest in my webinar, “How to Write Investment Commentary People Will Read.” A topic leaped out at me when I read the CFA Institute’s Financial Analysts Journal (FAJ) from 2021’s first quarter.

The title of “Levered and Inverse Exchange-Trade Products: Blessing or Curse?” (summary available, but subscription required to read the entire article) lays out the topic clearly. The authors say in their summary: “levered and inverse products are not, and cannot be, effective investment management tools.”

If this is a topic that interests you, as well as your clients and prospects, there are several approaches you can take.

3 ways you can use a Financial Analysts Journal article for investment commentary

Approach #1. Run with the topic on your own.

If you know this topic well, you may be able to opine at length off the top of your head. Go for it, if that’s what your clients expect and enjoy. The FAJ article has served its purpose if it only identifies a new topic for you.

A variation on this approach is to simply explain what levered and inverse ETFs are. If you’re writing for an audience of retail investors, they may never have heard of them or may not understand what they are. They’ll need a plain-English explanation. Of course, before you dig into the details, explain why your readers should care that these funds exist.

Approach #2. Use this article to bolster your case against these ETFs.

The authors discuss how “the most important problem with geared (levered) and inverse funds is that most of them are expected to collapse.” As part of this, they review these ETFs’ history and performance. There’s likely to be some information you can use to make your case against these ETFs.

The degree of detail that you go into will depend on your audience. Sophisticated institutional investors will understand (and be interested in) more details and technical information than your typical retail investor.

When you quote—or use statistics from—this FAJ article, refer to it as the source. That’s only fair. Plus, mentioning a reputable source like the FAJ will enhance your credibility.

I explain one approach to this kind of article in “Financial blogging tip: opinion + summary.”

Approach #3. Argue against the article’s conclusion.

If you think the article’s conclusion is wrong, say why. Is there a big hole in the authors’ arguments? Or perhaps you think the authors too quickly dismiss these ETFs’ value as what even they admit is “an inexpensive, convenient, highly levered, and limited-liability means for profiting from a directional price view.”

If your firm isn’t a creator of such ETFs, visit the websites of the creator firms. They’re bound to have helpful information.

If you disagree with the article, you may not want to refer to the article in your commentary. However, if your clients have read the article, mentioning it shows that you don’t ignore all information that disagrees with you. That’s good. You can also rebut specific points, while referring to areas where you agree.

Bonus investment commentary topics

Two of the other articles in this issue of the FAJ also struck me as potential sparks for your investment commentary:

  • Should Mutual Fund Investors Time Volatility?” —Volatility is a timely topic. You don’t necessarily need to go into the details of the authors’ thesis. You can see where the topic takes you.
  • Reports of Value’s Death May Be Greatly Exaggerated”—This is a topic close to the hearts of value investors who’ve been suffering for years as growth has outperformed. You may not agree with the take of Research Affiliates’ Rob Arnott and his coauthors. However, they raise questions worth considering. For example:
    • “Was value merely lucky in the past, or is it now arbitraged away by its own popularity?”
    • “Have structural changes in the economy made the value factor newly irrelevant?”
    • “What to expect from value?”

The FAJ’s other two articles could serve as fodder for some commentary, but their appeal is more limited. This blog post discusses the three articles that I think have the broadest possible appeal.

YOUR ideas?

Have you read something that could spur interesting investment commentary? Please comment.

Prepare clients for market volatility

Prepare your clients for the fact that their portfolios will experience periods of disappointing performance. I often share this advice in my presentations on “How to Write Investment Commentary People Will Read,” but I’m always seeking more specifics on how to do this. At the NAPFA Spring 2019 Conference, I picked up practical ideas for how financial advisors can achieve this.

Financial plan as source of certainty

In “Improving Investor Behavior Through Behavior Coaching,” Jay Mooreland of the Behavioral Finance Network touched briefly on how financial advisors can prepare investors for volatility. He suggested focusing on the financial plan as a source of certainty.

Talk less about performance, and more about the plan, he urged the audience. “Remind them that your plan accounts for this volatility,” he said. After all, as he said, we can’t control market volatility, the economy, or politics. We can, however, control our investment strategy and our behavior and our reactions. In fact, you can coach clients to view volatility as their friend. That’s because it gives people an opportunity to “buy low.”

Pre-commitment plan

Mooreland suggested creating a “pre-commitment plan.” Tell your clients you understand that it’s difficult to buy during volatility. That’s why you have clients commit in advance that if the market falls X%, they’ll move Y% into stocks. You can make plans for multiple levels of market declines. “From a behavioral standpoint, it can be powerful,” said Mooreland.

Mooreland also showed two market performance graphs that reinforced why investors shouldn’t let short-term volatility upset them. If you fell asleep on September 1, 2018, and woke up on Easter Sunday, 2019, the market would be at roughly the same level. That investor wouldn’t have experienced volatility.

The perception of volatility is a function of how often you look at the market, said Mooreland. The more often you look, the more often you’ll see what is ultimately a good investment look bad.

Use your communications to reduce the volatility and stress that your clients feel. Both you and your clients will benefit.

Avoid guarantees

Of course, don’t promise that the financial plan will protect clients from harm in any scenario. You know how the SEC feels about guarantees. Still, there’s plenty that you can do within the constraints imposed by the regulators.

Investment commentary–5 ways to outsource

Market and portfolio performance commentary is an important part of communications strategy for most investment and wealth managers. But sometimes writing that commentary becomes a drag on the firm’s employees. Or perhaps the firm realizes that its employees are better at strategy and portfolio management than writing. If this describes your firm, it may be time for you to outsource your investment commentary.

I see five main models for commentary outsourcing, depending on the kind of commentary you need. These vary in terms of how much control you give up over the content and the process.

5 ways to outsource investment commentary

Option 1: Completely surrender control of your investment commentary

If investing isn’t a core part of your firm’s expertise, you may not feel the need to express insights specific to your firm or your portfolios. In this case, you can simply buy ready-to-use commentary or commission a trusted financial writer to create the market recap and outlook that goes to your clients.

Buying commentary from a provider who sells the same text to multiple clients is likely to be easy on your budget.

Alternatively, there are writers—not me—who specialize in writing marketing commentary based on their own research. Both the content providers and the writers may allow you to customize their content. Before you edit or slap your name on their content, check the terms of your agreement with the provider.

Option 2: Hire someone to write interview-based market commentary

When you have distinctive, well developed views and the evidence to back them up, then this is a good option for you. Firms that struggle to find time to generate commentary also find this helpful, in my experience.

To ease your quarterly crunch, schedule your interview prior to the quarter’s end. I usually suggest seven to 10 days prior, so you have a good sense of how the quarter is shaping up.

Involve your key decision-makers in the interview. Sometimes that means only your investment strategist. Other times that may mean your investment policy committee, or one person who’s an expert on stocks and another who’s an expert on bonds. A good interviewer will give you questions to mull over prior to your call. This will help to find your commentary’s focus.

Here are some sample questions for your interviewer:

  • What is the most important message you want readers to take away from your commentary?
  • How did your clients’ portfolios perform relative to the market—and why?
  • What factors most influenced the market during the period? Do you expect their influence to continue?
  • Are there a few statistics that you’d like to highlight?
  • How have you adjusted your portfolios during the period under discussion and do you anticipate more changes?

Above all, it’s helpful to focus on how the information in your commentary affects your clients’ portfolios. After all, that’s their biggest concern.

After the interview, your writer will digest the information to create an outline or draft for your review. She will highlight questions or data gaps that she’d like you to fill. Then it’s your turn to provide the missing information and give feedback.

If multiple people give feedback, I suggest that you consolidate it in one document, with Microsoft Word’s “Track Changes” turned on. “Track Changes” will help your writer identify text to be proofed for grammar and related issues. If two of the evaluators disagree on a substantive issue, please reconcile your views before you forward your document to the writer.

What if significant new data comes in between the time of your interview and when you’re giving feedback to your writer? I ran into that with congressional negotiations over the sequester in 2012. One option is to discuss potential scenarios at the time of your interview, so your writer is prepared. Another option is to jot down your take on the news as part of your feedback to the writer, who can smooth out the words to make them more compelling, clear, and concise. Another possibility is to request a brief update call with your writer. Prior to that call, it’s helpful if you can send her some bullet points with your take on the news, so she can focus her questions to make the most efficient use of your time.

This interview-driven approach isn’t right for everyone. If your commentary typically changes significantly between the first and final drafts—or if it relies heavily on data that comes in late—you’re more likely to find option 3 more helpful.

Option 3: Hire an editor for your commentary

For investment professionals at some firms, putting their ideas into writing is a useful exercise. It helps them to discover their opinions and collect the supporting evidence. This is a form of writing to learn, as writing expert William Zinsser discusses in his book, Writing to Learn: How to Write – and Think – Clearly About Any Subject at All.

However, the folks who generate this commentary become so engrossed in the details that they may find it difficult to edit themselves. It’s hard to get distance from material when you’re immersed in it. Plus, a financial education usually doesn’t include intensive training in copyediting or in understanding the reader’s perspective.

One of the most valuable things that an editor can do is to reframe and reorganize the flow of your information. For example, she can expand on the WIIFM—“What’s in it for me”—of the content. She can also improve logical flow of the piece, and apply my first-sentence-check test.

Other valuable functions that your editor can perform include adding informative headings, streamlining text, and checking grammar and punctuation issues. Headings make it easier for skimmers to absorb your opinions and perhaps even be drawn into the details of your commentary. Sentences that average 14 to 22 words and lack distracting errors also help with reader comprehension and retention.

Option 4: Hire a writer for attribution-driven performance commentary

In contrast with market commentary, attribution-driven performance commentary is specific to your firm’s funds or portfolios. Mutual funds’ annual and semiannual reports also fall into this category.

The components of this commentary may include:

  • Your portfolio’s returns versus the benchmarks for the relevant periods
  • Attribution analysis—for stock funds, this would include the impact of sector allocations, stock selection, and possibly the cash position
  • Discussion of specific holdings that contributed to or detracted from performance relative to the benchmark
  • Optional: market commentary, transactions during the relevant period, and investment strategy

Some companies provide all of the necessary data directly to their writer, while others incorporate research or portfolio manager interviews conducted by the writer.

Option 5: Commissioning a critique for the DIY commentary writer

Some firms can boost the quality of their commentary simply by implementing suggestions they receive from a one-time critique of their writing. A writer-editor who’s familiar with commentaries can identify your commentary’s strengths and weaknesses, and provide guidelines for improvements.

For an assessment of your current commentary or newsletter, you can hire me to critique one example of your work or to coach you.

 

What’s next for you?

If you’re rethinking your firm’s approach to your commentaries, contact me to learn how I can help.

 

Disclosure: If you click on the Amazon link in this post and then buy something, I will receive a small commission. I only link to books in which I find some value for my blog’s readers.
Note: I am re-publishing this post in 2018 because it remains relevant. I edited this piece on Dec. 21, 2014 to correct some typos.

 

Word repetition—good or bad?

“Can I repeat this word throughout my report, or is it better to mix things up?” That’s a question I hear sometimes. Many people think that repetition is bad.

I like the following quote from Roger Rosenblatt in Unless It Moves the Human Heart: The Craft and Art of Writing:

Read Hemingway’s short stories, where he uses the same words over and over, and the words gain meaning with every repetition. If you have someone say something, let him “say” it—not aver it, declare it or intone it. Let the power reside in what he says.

I love that last line: “Let the power reside in what he says.”

I took a stand for repetition in “How to discuss index and portfolio returns: My case against synonyms for ‘return’.” I prefer plain old “returned.” However, many of my survey respondents favored more colorful words. I’m glad I found Rosenblatt’s quote to make my case.

Disclosure: If you click on an Amazon link in this post and then buy something, I will receive a small commission. I only link to books in which I find some value for my blog’s readers.

Quit underlining headings in your documents!

Underlining headings in your written documents used to be common. That’s no longer true, especially because underlined text now leads people to expect hyperlinks.

Underlining headings dates back to the days of typewriters. As Practical Typography says,

Underlining is another dreary typewriter habit. Typewriters had no bold or italic styling. So the only way to emphasize text was to back up the carriage and type underscores be­neath the text. It was a workaround for shortcomings in typewriter technology.

Please stop underlining headings, unless you want to prove that you’re old-fashioned.

Old vs. new style of headings

Sample 1

This is what headings and text sometimes looked like in the old days:

Heading

This is the text under the heading.

Sample 2

Here’s an easy, more modern style of heading:

Heading

This is the text under the heading.

When you compare the Sample 1 with the Sample 2, which is makes it easier for you to focus on the heading? It’s Sample 2.

That ease is important in encouraging readers to skim—rather than abandon—your content. That’s important now that everyone’s attention spans have shortened. If they continue skimming, perhaps they’ll find a heading that tempts them to dig into the details of what you’ve written.

Use heading styles built into your software

If you only have one level of headings in your document, it’s easy to make them all bold. But what if you have different levels of headings? You’re most likely to need multiple levels in a long document like a white paper.

Different heading styles are built into many types of software.

For example, here is one style you can find in Microsoft Word’s ribbon:
Style ribbon in Microsoft Word

 

 

Here’s what these styles might look like in a document:

Word heading style sample

 

You can learn more about using styles in Microsoft Word on Microsoft’s help page, starting with “Show or hide the ribbon in Office.” (Depending on your version of Word, your steps to find and apply headings may differ.)

Styles can get pretty fancy, but I tend to stick with the basics. I prefer to devote more time to writing than design.

Microsoft Office isn’t the only software with different styles for headings. You’ll also find them in WordPress. Here’s an explanation of headings in WordPress.

What are your top challenges in writing investment commentary?

As I prepare to deliver a June presentation on “How to Write Investment Commentary People Will Read,” I’m thinking about how to help you beat your challenges.

Please help me to think about this topic by answering my brief survey about investment commentary. I invite you to identify your top challenges and share tips in the survey. If you prefer, you can share your ideas as comments on this post.

Your comments will inspire my teaching on this topic. An earlier, longer survey on my blog became the basis of “Ideal quarterly letters: Meaningful, specific, and short.”

Folks have already raised some interesting topics in discussions. For example:

  • How can I write commentary that’s original?
  • How can I discuss timely yet sensitive topics without offending people?
  • How can I write long-form commentary for an audience that’s suffering from ADD?

I’m planning to allow lots of time for Q&A in my June 22 webinar, “How to Write Investment Commentary People Will Read.”

Early Bird pricing ends June 2

Register now to take advantage of Early Bird pricing on my June 22 webinar, which runs from 1:00-2:00 p.m. Eastern. If you’re not available at that time, you can register and watch the recording.

Visit the webinar’s web page for an overview of the program, testimonials, frequently asked questions, and more details.

Susan Weiner presents at NYSSA 2013

 

Fonts: By the numbers

The look of your financial reports makes a difference in the effectiveness of your communication. Fonts are part of your toolkit, as Professor Joyce Walsh explains in her guest post.

Fonts: By the numbers

By Professor Joyce Walsh, Boston University, College of Communication

Walsh_JoyceFor financial professionals, numbers are the heart and soul of client communications. But working with them in documents, presentations and online can be painful. Anyone who’s wasted an hour trying to get the decimal points to line up in a vertical column knows what I’m talking about.

Fortunately, there are ready solutions to numerical challenges. And they come from an unlikely source: your choice of font. You’ve probably spent some time considering the right font for your written material. (If you haven’t, you can read this paper I wrote about typography for financial professionals.) But the right font can also make your numerical life much easier—and your client reports and marketing material more effective.

If you’re having trouble with numbers in your documents and presentations, here are solutions to five common problems:

Problem #1: My numbers don’t align properly in columns

Arranging a column of numbers is a standard feature of most financial and investment reports. Whether you’re showing the market caps of your top 10 holdings or presenting a balance sheet, your figures need to stack up in an orderly way, with all decimal points in vertical alignment. If yours don’t, it’s because your font choice uses proportional figures, where each character varies in width. When 8s take up more space than 1s, your column will never line up properly.

The solution: Use a font that offers tabular figures, where each number is the same width on the page, and 1s take up the same horizontal space as 8s. If your default font doesn’t have a tabular option, consider investing in one that does or use a different, complementary font when presenting a numbers in a column. Many font families, like Gotham, offer both proportional and tabular options.

Pro tip: Not sure whether font figures are proportional or tabular? Here’s a quick way to find out: Type a line of 1s, then type a line of 0s underneath it. If the two lines end at the same place, the numbers are tabular.

Problem #2: When I bold a number in a column, it bulges out

Using bold is a great way to call attention to a significant number. But even if you’re using tabular figures, doing so can still throw a column out of alignment. If this happens to you, it’s because your font doesn’t have weight-duplexing figures.

The solution: Invest in a font that offers weight-duplexing, a feature that allows bold numbers to stack without bulging out of columns. Whitney, a font by Hoefler & Co., is a good example.

Pro tip: Speaking of bulging—10- and 12-digit numbers are common in today’s financial world, and they can wreak havoc in the best of layouts. Consider using a font that offers condensed numbers, which are designed to fit big numbers into narrow spaces without losing their readability or visual appeal.

Problem #3: When I use numbers in the body of a report, the spacing doesn’t look right

Financial professionals often use figures within the body of a report. And, yes, sometimes they just look off—the spacing seems out of whack or the numbers appear to be larger or smaller than the surrounding words. That’s probably because you’re using tabular figures instead of proportional ones. Within any font family, proportional figures are more like letters in their overall shape and appearance, and they tend to be more evenly spaced.

The solution: Always use proportional figures in running text or the body of a document. Their variable width makes them easier to read and lends a more harmonious feel to the content.

Pro tip: Beware of fonts with old-style figures, where the numbers approximate the size and shape of lowercase letter forms. While they work in a sentence, they look tiny and out of place in ALL CAP headlines. You’re safer with a font that offers lining figures, which are all-cap height and work well everywhere. Fortunately, most common system fonts default to lining figures.

Problem #4: I need more currency symbols for my reports

As the global economy expands to include emerging and frontier markets, forward-looking financial professionals need a font that goes beyond the dollar, pound, euro and yen to include symbols for currencies such as rupees, pesos and the new shekel. While it is possible to enter special numbers and codes to produce them, the process is slow and labor-intensive. If you use international currency symbols frequently, it’s just not practical.

The solution: Invest in a font family with extended currency symbols. Gotham, Mercury and Whitney are good examples of fonts with a wide range of monetary symbols.

Pro tip: If you want to make your articles, reports and presentations more useful and attractive for your audience, consider purchasing a font family that offers an extended character set. These typically include vertical and diagonal fractions, ordinals, and advanced mathematical and statistical symbols. Some even come with indices—circles with numbers in them—a very handy item if you want to compare plot points on a graph or add a distinctive touch to financial footnotes and disclosure references.

Problem #5: I need charts in my WordPress blog

The solution: You can apply the principles discussed above and post your charts as graphic files, such as JPGs or PNGs.

Pro tip: If you want to create charts and graphs while in WordPress, you will need a plugin. The WordPress Chart plugin is free and customizable, but is not user-friendly. Visualizer is also a free WordPress Plugin but is much easier to use. Just save your Excel XLS file as a CSV file. Then create a chart in the WordPress editor by selecting Add Media > Visualizations. To display the chart, simply add its shortcode to your post.

 

About Professor Joyce Walsh

Professor Walsh’s work has been featured in publications, exhibitions and corporate art collections around the world. Her book, Graphic Design Essentials: Skills, Software and Creative Strategies, was the first book to combine design fundamentals with creative software skills

Business data analyzing image courtesy of alexisdc/FreeDigitalPhotos.net

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Investment commentary numbers: How to get them right

Investment commentary calls for lots of numbers: benchmark and portfolio returns, economic data, and more. When you get those numbers wrong, you undercut your credibility and embarrass yourself.

I have some ideas about how you can avoid mistakes by proofreading and checking your facts.

My expensive mistake

A bad experience impressed me with the importance of checking numbers. Reading the professionally printed copy of my employer’s third-quarter commentary, I noticed a goof. It referred to the second quarter, instead of the third quarter, in one spot. This happened even though four of us had read the piece before it went to the printer. However, the eye tends to read what it expects to see. We all glossed over my error. Oops!

That was an expensive mistake because we had to get the piece reprinted. However, at least we avoided the embarrassment of clients seeing our mistake. Also, it spurred me to develop techniques for catching numerical errors.

Tip 1. Add numbers to your checklist

Checklists, which I recommend in “5 proofreading tips for quarterly investment reports,” can help you catch numerical errors. For a typical quarterly investment publication, I’d add two kinds of numerical items to remind you to check for accuracy and timeliness.

  • Calendar information—record the current year, quarter, and ending date for the quarter. I don’t know about you but I sometimes can’t remember how many days there are in June so it’s handy to know that I should write about “the period ended June 30.”
  • Major index returns for the relevant periods—if you’re writing about multiple investment styles and periods, you’ll use multiple index returns. If possible, run a report that shows only the relevant returns and displays them in a logical order. If you lack the access to run or customize reports, create your own list and proofread it carefully.

After you’ve completed your writing, make one pass through your document to check that you’ve used the right calendar information and returns.

Tip 2. Standardize your sources for index returns

If you’re new to writing about investments, you might think, “The S&P 500 Index return for the fourth quarter is the S&P 500 Index return for the fourth quarter.” Uh uh. There’s not just one number. For example, the return number that comes directly from Standard & Poor’s may diverge from the number spit out by your firm’s performance measurement system. Which will you use?

Your firm needs to decide which are the official sources for index returns. And then, stick with using those sources. By the way, it’s also good to create a rule for how many places to the right of the decimal point you’ll go in reporting returns.

You should create similar rules for reporting portfolio returns, too.

Tip 3. Document sources for other numbers

What about sources for other numbers? Document those as you write.

Footnotes can track your sources. Insert a footnote with your data source. Insert a link to the data if one is available. It’ll make fact-checking easier later on.

Tip 4. Use a fact-checker

Just as it’s hard for you to proofread your own work, it’s hard for you to fact-check it. You’ll tend to see what you expect to see.

If you have an employee, colleague, or friend who can help, ask that person to compare every number to its approved source. Being unfamiliar with numbers, they’re more likely to pick up on mistakes.

Don’t have a helper? Fact-checking will still catch some errors. I know it works for me, especially if I concentrate solely on fact-checking in one pass through my document.

Tip 5. Catch contradictory numbers with informed readers

How can you catch two authors using contradictory numbers? Say, for example, one author says U.S. economic growth was 2.2% while another says it was 2.5%. Both provide a source for their numbers, as suggested in Tip 3, but they don’t match. If you’re lucky, your fact checker will catch the disparity. But you can’t count on it.

There’s a higher chance of catching the error if you have the two authors with overlapping topics read each other’s articles. Ask them to look for inconsistencies. Another approach is to get a third party to look for inconsistencies. You might even ask them to list all of the document’s numbers from non-standardized sources. That would make it easier to see that there are multiple sources for a single number. All of this takes a lot of time.

There’s no easy way to catch these contradictory numbers. If you have ideas about how to solve this problem, I’d like to hear from you.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net