Guide your readers better than this trail guided me

I got lost. A poorly marked hiking trail sent my husband and me in one wrong direction and then another before we found our way. This reminded me of how writing that lacks trail markers sends readers astray.

The best trail markers for your writing are topic sentences. A strong topic sentence—the first sentence of any paragraph—summarizes the information covered by the rest of the paragraph.

Let me illustrate with an example of bad writing.

Factor #1 affects your investment performance. It can make a big difference in your investment returns. Factor #2 is important, too. So is Factor #3. #2 acts independently of #1 and #3. Factor #3 interacts with Factor #1, but not #2.

This would make more sense with a new topic sentence and some rearranging.

Three factors have a big impact on your investment returns: #1, #2, and #3. #1 and #3 work together, while #2 is independent of them.

To learn more about how topic sentences can help you, read “Quick check for writers, with an economic commentary example.”

If you don’t want to fix examples like this on your own, consider hiring me to help with your firm’s market or portfolio performance commentary. Or check out my June 26 webinar, “How to Write Investment Commentary People Will Read.”


Investment commentary – How do you keep it fresh?

How do you keep your investment commentary fresh quarter after quarter?

This is especially challenging for writers who cover a narrowly defined investment strategy and lack the freedom to go off on tangents. I’m thinking about writers of institutional investment performance commentaries rather than writers of high-net-worth quarterly client letters.

Solution 1. Express an opinion

“I try to put strong opinions in my commentaries.” This was the solution offered by a participant in a writing workshop I delivered to the Stamford CFA Society. I like her approach.

Your clients will have seen the quarter thoroughly rehashed by the time your commentary reaches them. Your opinions can make you stand out from the crowd, reminding them of why they hired you. Opinions can also address the question of “what makes you unique and why will it persist?”

You may worry, “What if I express a strong opinion that eventually turns out to be wrong?” Here’s my take on that:

  1. Your clients may not remember.
  2. It’s okay in moderation, assuming your opinion is well thought out and consistent with your investment philosophy and process.

Solution 2. Highlight what’s new in an old theme

Many managers repeat the same themes quarter after quarter. After all, some issues in investment markets—such as the prospect for an end to the Fed’s easy-money policies or the search for yield in a low-interest-rate environment—play out over a long time. Don’t abandon a significant theme solely for the sake of novelty.

However, you can tilt your treatment of a theme to new developments. For example, perhaps investor demand has bid up asset classes that formerly offered higher yields at attractive valuations. It’s worth mentioning that change and the market forces that drove it.

Your suggestions?

I’m curious about how you handle this challenge. Please share your strategy.

Need hands-on help with your commentary?

I can write your commentary based on interviews with your investment professionals or based on attribution analysis and other materials provided by you. I also edit commentary you’ve written to make it more compelling and reader-friendly.

If your budget is limited, hire me to evaluate your newsletter and suggest improvements that you can implement yourself.

Image courtesy of foto76 /


Note: I made minor edits on 12/30/19.

Quarterly client letter poll: Where do you put performance?

Performance is an important component of quarterly letters to asset management clients, so I wasn’t surprised to hear the following question at an investment commentary workshop: “Where should you discuss performance—at the beginning or end of your quarterly letter?

Here is what I think:

  • Either spot can work but your placement should be consistent from quarter to quarter. This lets your clients know where you answer the question of “How am I doing?”
  • It’s good to relate performance to your market commentary no matter where you place your clients’ performance.

Below are the results of a poll I conducted. Placing performance at the beginning of the letter was by far the most popular choice.

Performance placement poll results

Need hands-on help with your commentary?

I can write your commentary based on interviews with your investment professionals or based on attribution analysis and other materials provided by you. I also edit commentary you’ve written to make it more compelling and reader-friendly.

If your budget is limited, hire me to evaluate your newsletter and suggest improvements that you can implement yourself.


Note: On January 28, 2014, I deleted the poll and replaced it with a screenshot of the poll results.

How to handle “the Fed” in your writing

“The Fed” often pops up in market and economic commentary. This made me wonder about the best way to introduce the term as a nickname for the Federal Reserve.

From “Federal Reserve” to “Fed”

Here’s the Associated Press Stylebook‘s take on the Federal Reserve, with thanks to Deb Mackey for providing it in a LinkedIn discussion:

The central bank of the United States. It comprises the Federal Open Market Committee, which sets interest rates; the Federal Reserve Board, the regulatory body made up of Fed governors in Washington; and the Federal Reserve System, which includes the Fed in Washington and 12 regional Fed banks. Use Federal Reserve on first reference, the Fed on second reference.

Note that the Stylebook uses “Federal Reserve,” not “Federal Reserve Board” or “U.S. Federal Reserve” on the first reference.

How about the FOMC?

If you’re writing market commentary, you’re probably discussing the Federal Open Market Committee (FOMC), rather than the overall Federal Reserve, as writer David Lufkin noted in a LinkedIn discussion. After all, it’s the FOMC that sets monetary policy. The FOMC’s role raises two questions for me:

  1. When do you refer to the “Federal Open Market Committee” instead of the “Federal Reserve”?
  2. How do you abbreviate and introduce the abbreviation for the “Federal Open Market Committee”?

I give my take on the answers below.

FOMC vs. the Fed

Should your commentary specify that you’re discussing the Federal Open Market Committee?

It should if you’re discussing different parts of the Federal Reserve. Then, you need to distinguish between the FOMC, the Federal Reserve Board, the Federal Reserve System, and the 12 regional banks.

If you’re only discussing monetary policy, then sophisticated investors will know you’re talking about the FOMC. Less sophisticated investors probably don’t understand the distinction between the Federal Reserve and the FOMC. Also, they probably don’t care.

Look at how newspapers deal with this issue. They often stick to discussing “Federal Reserve policy.” If they get more specific, they refer to the “Fed’s policymaking committee,” rather than the FOMC. This is similar to what I discussed in “Quantitative easing for regular folks: 3 lessons from The New York Times.”

In my opinion, you don’t need to specify FOMC—at least, not in most situations.

Introducing FOMC as an abbreviation

If you discuss the Federal Open Market Committee repeatedly, you’re probably abbreviating it as FOMC after the first reference. You have two options for how to introduce the abbreviation:

  1. Use “Federal Open Market Committee” the first time you refer to the Fed’s policymaking committee and “FOMC” for the second and subsequent references.
  2. Write “Federal Open Market Committee (FOMC)” the first time, and then switch to FOMC.

For common abbreviations, the first approach seems to prevail. I think going direct to FOMC works best when you’re writing for readers who immediately recognize the term FOMC.

I prefer the second approach when writing for an audience that’s less familiar with the FOMC. I agree with Bryan Garner, who says in Garner’s Modern American Usage:

…the best practice is to give the reader some warning of an uncommon acronym by spelling out the words and enclosing the acronym in parentheses when the term is first used…. On the other hand, well-known acronyms don’t need this kind of special treatment—there’s no need to announce a Parent-Teacher Association (PTA) meeting.

Go easy on abbreviations

I rarely see “FOMC” in newspapers that refer to the Federal Market Open Market Committee. Perhaps that’s because they’ve taken to heart the idea that too many abbreviations make articles hard to read.

Garner says, “One of the most irritating types of pedantry in modern writing is the overuse of abbreviations, especially abbreviated names.” He also says, “Abbreviations are often conveniences for writers but inconveniences for readers. Whenever that is so, abbreviations should vanish.”


2017 note: I’m working on a post about whether to refer to the Fed as “it” or “they.” Stay tuned for the results!

If your investment or market commentary could benefit from professional editing or writing, let me know. I can edit what your investment professionals write to make it reader-friendly. If your professionals are too busy to write, I can interview them to capture their insights. I also understand attribution analysis, so I can write portfolio performance commentary based on your data.

For more insights into effective investment commentary, read my article, “Ideal quarterly investment letters: Meaningful, specific, and short.”


Quantitative easing for regular folks: 3 lessons from The New York Times

“Quantitative easing” pops up regularly in economic and market commentary. The term conveys a lot to financial professionals who know the fine points of QE3 vs. QE1. However, it’s likely to make the average American say, “Huh?”

This is why I suggest that you learn from newspapers when you discuss quantitative easing—or other technical terms—in your communications aimed at ordinary folks. I found three techniques in recent articles.

Technique 1: Avoid the topic entirely

Sometimes newspapers avoid the topic entirely, even when it’s relevant. For an example of this, see “U.S. Economy Grew 1.7% During the 2nd Quarter, Topping Forecasts” in The New York Times, which simply refers to the Fed’s “huge stimulus efforts,” which, of course, include more than just quantitative easing. You should consider this technique, too, if the details of the Fed’s bond purchases aren’t important to your discussion.

Technique 2: Discuss the topic, but skip the technical term

Another technique is to describe quantitative easing in general terms, as in the following New York Times headline: “Bond Purchases by Fed Will Continue, at Least for Another Month.” The article described the Fed’s adding “$85 billion a month to its holdings of mortgage-backed securities and Treasury securities.”

Other references in the article included:

  • “Asset purchase program”
  • “Monthly asset purchases”
  • “Bond-buying program”

In many cases, these descriptions provide enough detail for your readers.

Technique 3: Use the term, but explain it

The term “quantitative easing” didn’t surface until close to the end of the Times‘ “Bond Purchases” article, with the following sentence:

Other economists, including Lawrence H. Summers, a leading candidate to succeed Mr. Bernanke, have expressed similar concerns about the purchases, which go under the label “quantitative easing.”

Because the article had described the purchases earlier, it didn’t explain them in detail in the sentence above. If this sentence were the article’s first reference, the author could have included an explanation something like the following:

quantitative easing, the Fed’s purchase of long-term bonds to help stimulate the economy by lowering long-term interest rates

What’s right for you?

Ask yourself whether your readers need to see the term “quantitative easing.” Perhaps it’s enough for them to be aware of “the Fed’s bond-buying program.

If you’re writing for a mixed audience of regular folks and investment professionals, you may choose to use “quantitative easing.” However, I suggest in that case that you define it on first use and put the term in context, as I did in my discussion of “Technique 3.”

What’s YOUR approach?

Do you use “quantitative easing” everywhere, avoid it entirely, or mix it up?

Need hands-on help with your commentary?

I can write your commentary based on interviews with your investment professionals or based on attribution analysis and other materials provided by you. I also edit commentary you’ve written to make it more compelling and reader-friendly.

If your budget is limited, hire me to evaluate your newsletter and suggest improvements that you can implement yourself.

Writing: More specific is better until it’s not

Investment commentary writers often struggle to make their writing more concise. Sometimes being more precise helps.

How to do it

Here’s a before-and-after example:

BEFORE: Value stocks outperformed growth stocks in the last month of the quarter.

AFTER: Value stocks outperformed growth stocks in June.

See the difference? I find many examples like this when I compile and edit fund performance commentary for my asset management clients.

The flip side

On the other hand, commentary writers sometimes go overboard with specificity. One of my pet peeves is excessive references to the quarter under discussion.

If you name the quarter in the beginning of your paragraph, and you don’t change periods, there’s no need to repeat “the third quarter” in every sentence. The repetition is boring. It also uses up space that could be spent on meaningful discussion of the drivers of performance.

What do YOU suggest?

You’ve probably read investment commentary that could benefit from greater specificity. What are your suggestions in this area?

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/