Tag Archive for: investment commentary

Poll: What newsletter strategies work best for investment and wealth managers?

Newsletters are an important part of marketing for many investment and wealth management firms.

You’ve got lots of options. 

  • Print newsletter vs. e-newsletter
  • Quarterly, monthly or weekly frequency
  • Market commentary and/or other topics
  • Articles that you write yourself vs. articles written by a writer whom you hire, so they reflect your firm’s views vs. articles that are mass-produced by a firm that sells the same content to others

I’d like to learn your opinion on what works best. Please answer the poll in the right-hand column of this blog. 

Also, feel free to leave a comment below.

Bloggers’ top two punctuation mistakes

“Financial blogging has it’s challenges”, said the copywriter. 

If you identified the errors in the sentence above, you probably aren’t making bloggers’ two most common punctuation mistakes. These mistakes aren’t confined to blogs. I see them in every kind of financial and personal communication. 

It’s vs. its

“It’s” is a whopping exception to the rule that you form the possessive by adding an apostrophe and the letter s.

“The performance of the mutual fund” becomes “the mutual fund’s performance,” but “the performance of it” becomes “its performance,” with no apostrophe.

“Apostrophes should not be used with possessive pronouns because possessive pronouns already show possession,” as explained by the Online Writing Center at Purdue University. So don’t add an apostrophe to “yours,” “ours,” “his,” “hers,” or “theirs.”

Remember: “it’s” always means “it is.”
Quotation marks and misplaced punctuation
Punctuation generally belongs inside the closing quotation mark. So my opening sentence should be punctuated like this: “Financial blogging has its challenges,” said the copywriter. 

The Associated Press Stylebook puts the rules like this:
1. “The period and the comma always go within the quotation marks.”
2. “The dash, the semicolon, the question mark and the exclamation point go within the quotation marks when they apply to the quoted matter only. They go outside when they apply to the whole sentence.”
The Stylebook is talking about punctuation at the end, not the beginning, of a quotation.

However, if you’re writing for a British or Canadian audience rather than a U.S. audience, punctuation goes outside the quotation marks. Grammar Girl says, “Printers found that the periods and commas were more stable when they were placed inside closing quotation marks, so that’s the way they started doing it,” according to “Why are British English and American English different?” Grammar Girl seems to agree with my friend who thinks the British practice is more logical. Still, punctuation-conscious Americans wince when you flout the American way. 

The bottom line
Earlier this year I asked my newsletter readers “Do grammar or punctuation errors affect the writer’s credibility in your eyes?”

0%   No, I don’t notice errors
2%   No, I don’t care
22%  Yes, but I forgive small errors, especially in social networking posts
75%  Yes, it generally hurts my opinion

Only 2% of respondents answered “No.” That sends a strong message about the impact that errors have on your readers.

So, please

  • Distinguish between “it’s” and “its.”
  • Always put your commas and periods inside your closing quotation marks.


Do you have a question about these punctuation practices? Ask it in the comments below.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Financial writer’s clinic: Great title, lousy intro

“When Will Housing Recover?” This title reeled me in. I flipped directly to the article, bypassing two others. But what I found disappointed me. I’ll use this article’s mistakes to suggest rules you can follow in your article introductions.

The writing problem: Boring introduction
Then article’s first paragraph stopped me cold. It held a long-winded description of a home price index’s composition. It’s information that I might exile to a footnote if I wrote a white paper on this topic.

Here’s the first sentence of the article: “The S&P/Case–Shiller Home Price indices measure the growth in value of residential real estate in various regions of the United States.”  The first paragraph devotes 247 words to the details of the markets tracked by these 23 indices.

Three rules for an interesting introduction
1. Answer the key question. That’s “What’s in it for your readers, if they slog through your article?” The authors nailed this question perfectly with their title. But they forgot about it when they wrote their introduction.
2. Keep it short. Direct marketers have discovered that readers start to lose interest once a paragraph runs longer than 42 words. Sure, investment professionals have more patience than folks opening junk mail. Still, the authors’ 247 words–almost six paragraphs of words according to direct marketers’ standards–is way too long.
3. Don’t save the good stuff for your conclusion. If you’re like me, you learned in school that you should build your argument logically to a conclusion. Throw that habit away, if you want people to read what you write. At a minimum, hint at your conclusion in the introduction to your article.

My rewrite of the article’s introduction

Everybody wants to know when housing will recover. But you can’t make a meaningful estimate until you understand the data. It seems to us that the severity of the decline has been overstated because of problems with the S&P/Case–Shiller Home Price indices. Once we understand the data better, we can make a case for housing getting on the road to recovery by the second quarter of 2010.

The indices are dominated by states, such as California and Nevada, that have experienced a housing boom followed by a bust. In fact, price increases and declines vary greatly by state. The price of housing in roughly two-thirds of our 50 states have risen–or fallen by no more than 5%–during the two years since the fourth quarter of 2006.

My rewrite isn’t perfect. Some of the sentences are awfully long. But I feel confident that it’s more engaging than the original. What do you think?


Ignore this advice–at least some of it

10 Words to Use in Your Website Copywriting” gives you some great advice. But some of author Eric Brantner’s suggestions need to be adjusted for investment management websites.

Eric lists 10 words that tug powerfully on human emotions. 

Can you guess which word I’d ban from your vocabulary? 

Yes, it’s “guaranteed.” Bandying about “guaranteed” can get you in trouble with the SEC.

I have my doubts about “new” when it comes to something as sensitive as your prospective client’s money. I think they may prefer “proven.”

As for “free,” it may seem tacky to offer something free on an investment management website. Sure, you can offer a free report, but don’t hype it like one of those late night TV commercials for a super duper chopping gadget.

“You” is my favorite word on Eric’s list. But I know some firms consider it undignified. They prefer to talk about “clients” or “investors.” What’s your preference?

If you MUST use "secular" in your investment commentary…

…please follow The Wall Street Journal‘s example. Define secular the first time you use it. 

Here’s how Mark Gangloff did it in “TALF and Ilk Won’t Cure Economic Ills” The Wall Street Journal (Mar. 5, 2009), p. C1: “Instead, credit has dried up this time because of the more secular—meaning structural or long-lasting—phenomenon of a debt bubble.”

Secular is great shorthand for conversations between investment professionals. But it may confuse investors who think of secular as the opposite of religious.” After all, see what comes up when you Google “define: secular.”




Related posts:
* “Quantitative easing” is a weasel word 
* “Amid Market Gloom, Fund Manager Fights Against Jargon


MFS Investment Management is using LinkedIn to circulate commentary

MFS Investment Management has set up a LinkedIn group called MFS Investment Commentary. 

Its purpose? According to the group profile, it is “A group for financial advisors and investment industry professionals interested in getting updates on MFS’s outlook on financial markets around the world. James Swanson’s Chief Investment Strategist corner, the Week in Review, and the month Global Perspective are featured here. U.S. investment products offered through MFS Fund Distributors, Inc.”

At a quick glance, it looks as if many of the group members are MFS employees. But perhaps they haven’t publicized it yet among the professionals whom they’re targeting.

Have you noticed any other fund or investment management companies setting up LinkedIn groups? What about other uses of social networking?

Related post: Eaton Vance, Evergreen, and FRC on “Communication Strategies for Good Times and Bad”

Fixed income attribution falls short

Attribution analysis can help investment managers keep their clients, even in down-markets, said David Spaulding, president of The Spaulding Group, Inc. in his presentation on “Fixed Income Attribution: An Introduction” to the Boston Security Analysts Society (BSAS) on March 5. But good attribution analysis has been hard for fixed income managers to find. While equity managers have long enjoyed good models and software, the fixed income world is only catching up now, according to Spaulding. The Campisi model for fixed income attribution offers a solution. 

Explanation of underperformance can save the day
Some managers underperform their benchmarks, but keep their clients because of attribution. How’s that? Attribution helps them to explain what’s working–and what’s not. With that information, managers can reassure clients with their strategies for fixing things. This is a technique I talked about in “How can you report underperformance in your client letters? 

Equity-based models don’t cut it
But many fixed income managers create their performance attribution with the equivalent of one hand tied behind their back, based on what I learned from Spaulding. They’re using attribution models developed for equities, which look only at security selection and sector allocation. That’s a poor match for fixed income, where decisions about duration, sectors, and risk levels (ratings) are most important and security selection typically doesn’t count for much.

“If you’re not looking at duration, you don’t have fixed income attribution,” said Spaulding. That’s because the duration decision typically has the greatest impact on fixed income performance. 

Campisi model fixes problems 
The Campisi model, developed by Stephen Campisi, CFA, may help. It is an attribution model with the potential to  play the role for fixed income that two Brinson models play for equities, said Spaulding. The model views bond returns as coming from income in addition to price change. Spaulding ran through the steps in applying the model, including gathering the data, calculating the contribution effect for the benchmark and the portfolio, and calculating the attribution effect.

The BSAS audience seemed receptive to the Campisi model. But some expressed concern about handling derivatives in a fixed income portfolio. Spaulding said that assets that aren’t in a portfolio’s benchmark should be isolated and only their contribution should be discussed. However, I got the sense that managers who invest heavily in derivatives aren’t satisfied with that solution.

It looks as if challenges still remain until fixed income attribution achieves the usefulness of its equity counterpart.

If you’d like a copy of Spaulding’s PowerPoint presentation, e-mail your request to The Spaulding Group.

"Amid Market Gloom, Fund Manager Fights Against Jargon"

Are you using too much jargon in your market commentary? 

Read “Amid Market Gloom, Fund Manager Fights Against Jargon” for the tale of a British fund manager trying to eliminate jargon and wordiness.

Here are most of the terms he’s fighting:

  • Aggressively
  • Backdrop 
  • Basis points
  • Bets
  • Drawdown
  • Going forward
  • Is primarily engaged in
  • Headwinds, tailwinds
  • Musings
  • Names
  • On the back of
  • Perfect storm
  • Space

Some of these are okay with me. “Headwinds” bothers me the most. The article suggests “positive trends” as an alternative. “Basis points” is one of my pet peeves.

What investment jargon are you battling?

"Making Sense of the Dollar"

The U.S. economy is in better shape than you think. It may even start coming back in the second half of 2009, and the dollar will end 2009 higher versus the euro and yen.

At least, that’s the optimistic outlook Marc Chandler, Brown Bothers Harriman’s global head of currency, set forth in his keynote address at NICSA (National Investment Service Company Service Association) East Coast Regional Meeting on January 15, “Making Sense of the Dollar.”

The U.S. will emerge from this crisis stronger than before, just as we emerged stronger from World War Two and subsequent crises, Chandler told his audience.

Continue reading my article, “Making Sense of the Dollar: The U.S. Will Lead the World Again” in Advisor Perspectives.

Goodbye, Lehman Agg!

The term “Lehman Agg” used to roll off my tongue. I felt like an insider knowing that was short for “Lehman Brothers U.S. Aggregate Index” of bonds.

It feels strange to be typing “Barclays Capital U.S. Aggregate Index (formerly the Lehman Brothers U.S. Aggregate Index)” as I create my fourth quarter performance reports.

Does this make anyone else pause?