What can go wrong, will go wrong.
That’s something we learn every day. Even when we establish investment goals and plan how to meet those goals, there are myriad details that can trip us up. Whether it’s recordkeeping or settlement or trade execution or custody, little things matter—and little things add up to big things.
Dante’s Inferno presents a picture of what can go wrong. Mid-way through his life’s journey, exiled and unable to return home, he looked at the problems in the world around him and put them into three categories: errors of excess, arrogance, and greed. Excess takes a good thing too far. It’s an issue of self-control. Arrogance encourages people to dismiss contrary opinions or facts. And greed can lead unsavory folks to deceive or defraud others.
A few years ago Charles Ellis described investing as a loser’s game, where the way to win is not to lose. Stock market investors can outperform by avoiding excesses; bond buyers need to watch out for problem credits. By avoiding unforced errors—doing simple things like reading your statements or looking up your advisor’s credentials—you will do better than most folks.
Murphy’s law applies to much of life, because life is complex. But if we attend to the details we know, we can keep ourselves from getting lost along the way.
Douglas R. Tengdin, CFA
Chief Investment Officer