July 2023

A Reflection on Past Reflections

It has been over two years since the December 2020 blog. We continued finding ways of surviving through the pandemic and political upheaval. This may be an appropriate time to reflect on a short passage from that last blog which was aptly named “A Time for Reflection”:

Blurred vision
In 2019 one expected the year 2020 to live up to the phrase alluding to clarity of sight. Alas a virus of another sort got in our eyes and clouded our vision. A virus that distorted our view of reality. The poison that emanated from the minds of those who chose to divide us for their own political and ideological gains, turned citizens against each other in a manner that has prolonged social and economic discord.

In spite of the dark storm clouds that have passed over us, we seem to be in a better place with an economy that flies in the face of the experts who expected us to be in a recession by now, with an inflation rate out of control. Yes, we still have challenges such as the continuing war in Ukraine, worldwide violence which many consider to be the aftermath of the pandemic and of course, global climate change. And last but not least, artificial intelligence (AI).
AI is a fairly new challenge, a two-edged sword that comes with promises of enhanced productivity along with the dire consequences of misinformation on steroids. We will see how this phenomenon unfolds over the next two years.

Note:  This blog tries to respect the reader’s time. We are inundated with material now-a-days from web pages, emails, magazines, etc. Each source, all too often repetitious, robs us of some of our time.

Practices All Investment Managers Should Follow


When Olympic gold medalist Usain Bolt’s investment account mysteriously diminished by about $13 million dollars, his investment advisors appeared to be as surprised as others not involved in the administration of his account. How can that be? Who is minding the store?

An investment advisor has a fiduciary responsibility to secure suitable investment instruments, monitor, protect and hopefully increase the value of a client’s assets. Let us assume in this case that the account holder was informed of the kinds investments that would be utilized and that the client was in agreement with the choice of assets.  The investor does not have to be aware of the details of a portfolio at all times, but the account holder should nonetheless be apprised on a regular basis about what exactly, is going on in the portfolio. A year should not pass without some communication between investor and advisor.

Advisors should avoid direct control over cash transactions and instead use financially strong third-parties as custodians. This frees advisors to direct their efforts at managing assets that clients have given them the power of attorney to administer. In addition to managing client assets, advisors should monitor custodians who should publish financial statements at least annually. And every transaction in your portfolio should trigger communication to you, alerting you to the details. This notice should not be coming from an account representative or some such role, but should be generated from an entirely different department responsible for client communication. This notice should be directed to the client and a copy to the advisor. If your advisor and the custodian being used by that advisor do not follow these practices, look elsewhere.

Advisors should refrain from making promises or guarantees of performance, since we mere mortals do not have crystal balls. Advisors should also report to investors at least annually to set goals and to review past performance. Hopefully this article will encourage you to be a more proactive investor and not leave everything up your advisor. You may find out too late that your trust was  misplaced.