By Ben Carlson

1
 Agenda
1. Why Women Make Better Investors Than Men

2. Some Common Sense Thoughts on Investing

3. How We Turned Blogging Into a Business

2
 Men Are From Mars,
Women Are Better Investors
Male Investors:
• Trade more frequently
• More prone to
overconfidence & gambling
• Hold more volatile portfolios
• Expect higher than average
returns
• Act on incomplete
information
Female Investors:
• Trade less frequently
• More likely to attribute
success to luck or fate
• Hold less volatile portfolios
• Expect lower than average
returns
• Avoid acting on incomplete
information
Source: Terrance Odean & Brad Barber
Source: Betterment
Source: Betterment
Shark Week
What is Risk?
Unfortunately, Stocks Go Down
Stocks
Bonds
Cash
 Stocks vs. Bonds vs. Cash
Growth of $1, 1926−2016
$100,000

$10,000 $6,031 US Stocks

$1,000

$134 US Bonds
$100
$21 Cash
$10
$13 Inflation (CPI)
$1

$0
1926 1936 1946 1956 1966 1976 1986 1996 2006 2016
Source: DFA
A Walk in the Park
 Unfortunate Realities of the
Investment Business
• A talented sales staff will trump a
talented investment staff when
attracting $ from clients

• The products that sound the best are

often the worst ones to invest in

• Clients are often in search of

unrealistic solutions

• Increased activity does not necessarily

lead to better results

• There are no guarantees

What You Want to Hear
“I can give you guaranteed double-digit
returns.”

“Here’s what happens next…”

“Just trust me. I got this.”

“I’ll get you out before the next crash.”

“We’ll give you all of the upside but

none of the downside.”

“It’s a sure thing. You’ll be rich

overnight.”

“There’s no risk involved.”

Everyone Loves a Good Story

We prefer emotional narratives to accurate data

Stories stick with us not statistics

What You Need to Hear
“I’m not sure.”

“We think in terms of probabilities, not

certainties.”

“No one know what’s going to happen to the

markets in the short-term.”

“The great strategy you can’t stick with will

leave you worse off than the good strategy you
can stick with.”

“Saving more money is your best investment

option.”

“Process over outcomes.”

Pessimism Sells…
…While Gradual Improvements
Go Unnoticed
The Change in Emotions
Chauffer Knowledge
Experts
 Your Brain on Money
• The brain activity of a person making $ on their
investments is indistinguishable from a person
high on cocaine or morphine

• Financial losses are processed in the same

area of the brain that responds to mortal
danger

• Our brains automatically & unconsciously

expect a 3rd repetition after it sees 2 in-a-row

• The anticipation of a gain evokes a much larger

response than actually receiving the gain

• The bigger the potential gain the greedier you

feel (regardless of how poor the odds might be)
Doing Nothing is a Decision
A Diversity of Opinions

Source: Michael Mauboussin

Source: Michael Mauboussin
The Liberation of Limiting Yourself

Five simple rules from The

White Stripes for their
White Blood Cells album:
1. No blues
2. No guitar solos
3. No slide guitar
4. No covers
5. No bass
 The Benefits of Writing
• Writing is not just typing – it’s
thinking, researching & learning
what you really think

• It forces you to streamline your

arguments & principles

• Allows you to educate yourself &

others

• Documents the reasons behind your

decisions
Blogging as a Business?
 Personal Brands
Percentage of Affluent Individuals
Who Can Identify a "Favorite Brand"

80%
2007-08 2014-15

67%
61%
58%

47%
40%
37%

28%

Fasion Brand Jewelry Brand Luxury Hotels Retailers

Source: Scott Galloway

The Rise of the Machines
Fending Off the Robots
Successful Investment
Advisors…
…manage investors more than investments.

…understand that the long-term is the only

time horizon that matters but people don’t
live life in the long-term.

...obsess about their clients, not their

competitors.

…speak in plain English to help their clients

understand what’s going on with their money.

…help clients focus on those things that they

control and ignore everything else.
 Things You Have
No Control Over
• Tax policy
• Economic growth
• Stock market returns
• When the next bear market
strikes
• The Fed
• Congressional actions
• Interest rates
• The reactions of other
investors
 Things You Do Control
• How much money you save
• Having a long-term plan
• Diversifying your assets
• Your asset allocation
• Recognizing your biases
• Investment costs
• What you choose to read/ignore
• Your reactions to market
movements
• Defining your risk profile & time
horizon
38
Questions?