Tag Archive for: investment commentary

Plain English can bring your financial topic to life

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Must an article about how to prevent another Flash Crash be difficult to understand?

Not if you use plain English, as Floyd Norris did in “Time for Regulators to Impose Order in the Markets,” his May 14 column in The New York Times.

Here’s Norris’ first sentence: 
“If your machine makes a mistake that the dumbest human would never make, then maybe you don’t have a very good machine.” 

Even a child can understand Norris’ lead sentence. Norris created an image in my mind that made it easier for me to follow the rest of his column about the changes he believes are needed for the New York Stock Exchange.

The next time you write an investment or financial article, try to use plain language to introduce your topic. Your readers will thank you.

Related posts
* Financial writers clinic: Lessons from Floyd Norris of The New York Times
* Vary your paragraph length like New York Times columnist Floyd Norris
* Financial writers clinic: Rhythm can help you

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Copyright 2010 by Susan B. Weiner All rights reserved

The compliance-constrained advisor’s guide to LinkedIn, Part II: Status updates

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Your LinkedIn status updates are powerful reminders of your existence to clients, prospects, and referral sources. You can use them in ways that even compliance officers can love.

My top three suggestions are to use materials that are already compliance-approved, share your professional interests, and share your professional interests.

1. Use compliance-approved materials
Every firm has materials that are approved for use with the general public. It could be your quarterly investment commentary, a newsletter, or even a brochure. Take advantage of this information by writing about it in your status update line.

You can say something as bland as “Check out our 2nd quarter market commentary at http://…” or spice it up by asking a provocative question and following the question with a link. Check with your compliance officer to learn how much you can say without raising his or her anxiety.

2. Share your professional interests

You can mention professional meetings that you’re attending or topics that you’re reading about. 

Let’s say you’re trying to attract clients with complex estate planning needs. Your prospects will probably feel reassured to learn that you’re reading journal articles and attending panels on these topics. Your update about an upcoming event may lead to your referral source setting an appointment to meet you there.

You can also share company news, such as the hiring of a new relationship manager or the debut of a new product.

3. Share your personal interests

People like to do business with people whom they like. Share your volunteer interests, hobbies, or even something that makes you smile. It’ll help people to develop a connection with you.

Compliance note: For more on the compliance aspects of social media, check out Bill Winterberg’s excellent article in the Journal of Financial Planning, accessible to members only. Chad Bockius’ “LinkedIn Compliance Self-Assessment” focuses on compliance for registered reps. Both articles point to the importance of monitoring and archiving social media activity.

____________________  
Receive a free 32-page e-book with client communications tips when you sign up for my free monthly newsletter.  

Copyright 2010 by Susan B. Weiner All rights reserved

Reader question: How can I share my investment commentary on LinkedIn?

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You can use LinkedIn, yet stay within your compliance officer’s guidelines, by sharing approved materials through your LinkedIn “status line.” I often suggest this to investment managers and financial advisors.

So I wasn’t surprised to receive an email saying, “Help! Please remind me how to share a link to my investment commentary on LinkedIn.”

Here’s my answer.

Step 1 Shorten the URL that takes readers to your commentary. The URL for your commentary is probably too long for the limits of LinkedIn’s status updates, especially because you need text to lure readers to your commentary. This is when link shorteners come in handy. You can use a free service, such as TinyURL.com. To shorten your link, simply follow the directions at the link shortening website of your choice.


Step 2 Enter your text into LinkedIn. When you go to your LinkedIn home page, you’ll see below your Inbox the Network Updates section.  Type your text into the box. If your commentary is provocative, you might say something like “You won’t believe what I’m saying about the stock market  http://tinyurl.com/…..” LinkedIn automatically converts URLs beginning with http:// into live links.

Hit the Share button and your investment commentary becomes available to folks on LinkedIn.

Related posts
* The LinkedIn status line is your friend, whether you’re looking for clients or a job
* My top tips for LinkedIn newbies who want to attract financial clients, referrals, and jobs

J.P. Morgan Funds’ measured optimism about U.S. economy

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The economy is on a rebound, but it’s a long way back to normal, said David P. Kelly, chief market strategist, J.P. Morgan Funds, to NICSA’s East Coast Regional Meeting on Jan. 14, 2010. 

A Jupiter of a recession
Economists have seen recessions like 2008-2009 before. so they can predict the broad shape of the economic recovery, according to Kelly.

U.S. recessions are just like the solar system. There are big planets and little planets, but no medium planets, said Kelly. “This was a Jupiter among recessions,” said Kelly. Even though it’s the largest recession since World War II, it’s not unprecedented. In fact, it’s not that different in size from the recessions of 1957, 1980, and 1982. As a result, he foresees a robust recovery.

“The bigger the recession, the bigger the bounceback,” said Kelly. 

Keys to U.S. economic growth 
The U.S. economy will rebound strongly because the following areas became so weak, they must bounce back, said Kelly.
1. Auto consumption
2. Residential construction
3. Equipment
4. Inventories 

Employment outlook 
Kelly made the following predictions

  • Jobs will begin to grow in the first quarter of 2010, which will produce income to support economic expansion.
  • Unemployment will rise as new jobs are created. This is because unemployment statistics are calculated using the number of people actively seeking jobs. People will return to the market as they see better prospects for success.
  • It’ll take five years to get back to full employment. Employment may rise to 9% by year-end 2010. 

More predictions by Kelly

  • Corporate profits will improve. This is because of low costs, low interest rates, and especially because of the lack of upward pressure on wages. On the wage issue, Kelly quoted the singer Beyonce, saying that employees realize that employers know “I can have another you in a minute.”
  • The risk of deflation is greater than the risk of inflation.
  • The biggest risks to Kelly’s positive scenario are conflict with Iran, which would drive up oil prices; and  banks finding it difficult to lend due to regulation, taxes, and uncertainty about regulation and taxes.

Opportunities 

  • It’s not too late to get back into stocks. Some people worry that maybe they “missed the train.” Davis’ reply? “This is a very long train on a very long platform.” He noted that stocks have recovered less than half of what they lost during the bear market. Also, there’s a lot of cash on the side lines that will eventually flow back into the stock market. On the flip side, bonds have become more risky, so now is a good time to overweight stocks relative to bonds, he said.
  • Non-U.S. economies will continue to outperform the U.S., and international stocks are cheaper than U.S. stocks. Also, a modest fall in the dollar will amplify gains somewhat for U.S. investors.
  • During Q&A, Kelly said, “I think buying a house will turn out to be a good investment, even over the next five years.”
  • On the topic of gold, Kelly said he wouldn’t put his mother into gold, even though the gold bubble has the potential to continue. The fundamentals don’t support gold’s price rise in 2009 because gold is supposed to appreciate in times of rising volatility and rising inflation. Meanwhile, volatility, as measured by the VIX has fallen and so has inflation. This bubble will eventually pop, he said.

Interesting graphs supported Kelly’s presentations. Financial advisors who participate in the J.P. Morgan’s Market Insights program can find the graphs in the firm’s quarterly Guide to the Markets.

Can you make a case for "mitigate"?

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Good writing uses strong verbs. Strong verbs are usually short. Thus, I strongly dislike the word “mitigate.” In fact, I can’t think of any time that I’d use mitigate instead of a synonym.

Some of my favorite synonyms for “mitigate” in the context of an investment or wealth management article include 
*  Cut
*  Ease
*  Reduce

Can you think of a case where it would be essential to use “mitigate” instead of a synonym? I’d like to know.

The LinkedIn status update is your friend, whether you’re looking for clients or a job

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LinkedIn status updates are a low-key way of reminding your contacts that you exist. My status updates have directly resulted in an editor asking me to write an article and new subscribers signing up for my newsletter. 

A brief positive message 
A status update is a brief update on your activities. It’s designed to show off something positive about you. For example, an asset manager might say “Peter Portfoliomanager is sharing his latest Economic Update.” A job hunter who wants to show that she’s not moping around might post “Joan Jobhunter just completed a marketing plan for Her Favorite Charity.”

Include link to maximize your impact
Peter Portfoliomanager should provide a link to his Economic Update. This makes it easy for a reader to engage more deeply with him. He can use a site like TinyURL.com to shorten the link to his Economic Update. This is worth doing because long links are cumbersome and LinkedIn limits the length of status updates. Here’s one of my status updates as an example: “Susan blogged: Statistics to calm nervous investors: Research on dollar cost averaging http://bit.ly/qKf3p” 

Everything you need is on your LinkedIn home page 
When you go to your LinkedIn home page, you’ll see below your Inbox the Network Updates section. First comes the box where you can update your status. Below that, you’ll see status updates from your connections. Status updates are also emailed to your connections as part of their Network Updates. By the way, LinkedIn lets you exercise some control over who sees your updates.

LinkedIn provides instructions for how to update your status.

Have YOU benefited from LinkedIn status updates? I’d love to hear your story.

 

How to make one quarterly letter fit clients at different levels of sophistication

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You have clients with different levels of financial sophistication. But you probably don’t have the time to write separate letters tailored to each client’s understanding of investment jargon. To help you manage your time–and keep your clients happy–here are my top five tips for a one-size-fits-all client letter.

I’d like to thank the Maine CFA Society for suggesting this blog post topic when I presented to them on “How to Write Investment Commentary People Will Read.”

How to make one quarterly letter fit clients at different levels of sophistication infographic

1. Keep it simple
If you use plain language, all of your readers will understand you.

Follow the example of Berkshire Hathaway’s Warren Buffett, who says, “When writing Berkshire Hathaway’s annual report, I pretend that I’m talking to my sisters…. They will understand plain English, but jargon may puzzle them.” Despite Buffett’s easy-to-understand style, plenty of financial sophisticates read his firm’s annual report.

2. Explain briefly
The Wall Street Journal has mastered the art of explaining technical terms with phrases set off by commas. For example, a reporter might write about “the carry trade, where investors borrow in currencies with low interest rates to invest in those with high interest rates.”

Savvy investors skim over the explanations, while the less knowledgeable gain a quick understanding.

3. Use a sidebar
A sidebar, which is a text box that’s set off from the main body of your article, can help you to accommodate different levels of knowledge among your readers.

Let’s consider my example in Tip #2. You could use a sidebar to explain the carry trade in more depth. Your goal could be to educate less sophisticated investors. Or, you may convey details to more educated investors that wouldn’t interest the rest of your readers.

4. Provide a glossary
A glossary at the end of your printed communication can help when you can’t squeeze all of the necessary explanations into the body of your text.

If you send electronic communications, you can provide click-through links to definitions on your website or elsewhere.

If you’re willing to link to third-party glossaries, you’ve got a variety of choices. I’ve found some good definitions on the following sites:

5. Provide a newsletter with articles for different audiences
If you have the luxury of writing a multi-article newsletter for your clients, consider including articles aimed at different levels of sophistication.

However, don’t vary your level willy-nilly. I’d suggest aiming your newsletter at a general audience and then consistently including one article targeting better educated readers.

How do YOU handle this challenge?
I’m interested in hearing from you. Please leave comments below.

 

Image courtesy of stupakidmod at FreeDigitalPhotos.net.

Tune up your writing skills on Nov. 10 or Nov. 19–or hire me to help you

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Could your writing skills use a tune-up? If you work with investments, you’ll get useful tips from my November 10 lunchtime presentation to Boston Women in Finance (BWF) on “How to Write What People Will Read About Investments.” Lunch is included in the program cost.

This program sold out the first time I presented it to BWF, so register early. 

It would be great to meet you at this program. Please introduce yourself as one of my readers.

If you’re a NAPFA member who lives in the Boston area, you can see me present on “How to Write Effective Emails and Letters to Your Financial Planning Clients” at your November 19 study group. 

If you can’t attend either presentation, consider hiring me to train people at your company. I’ve presented across the U.S. and Canada on “How to Write Investment Commentary People Will Read.” I can develop presentations tailored to you. 

Note: I updated this blog post on Oct. 21 with the BWF registration link and NAPFA information.

3Q09 vs. Q3 09 –which is better?

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You probably know that Q is the abbreviation for quarter. But what’s the proper way to abbreviate “third quarter of 2009”?

I prefer 3Q09 to Q3 09. It seems cleaner to separate the 3 of third quarter from the 09 of 2009. I worry that readers will get confused if the numbers in Q3 09 run together, as in Q309.

Looking for evidence to back up my opinion, I did a Google search. I found about 121,000 instances of 3Q09 vs. 10.9 million for Q3 09.

Wow–that’s quite a disparity! Q3 09 is the format that @BillWinterberg sees in regulatory filings. Perhaps that explains it. I wonder if the SEC requires the Q3 09 format. 

Please answer the poll in the right-hand column of my blog. I’ll track your answers with interest and will report on them in my November e-newsletter. Thank you!

Thank you, Maine CFA Society!

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The Maine CFA Society got into the spirit of my Sept. 17 presentation on “How to Write Investment Commentary People Will Read.” They skewered me for using an unnecessary adverb in a sample sentence.

That’s the enthusiasm I enjoy when I teach CFA charterholders to write more concise, compelling investment commentary.