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Ideas Post

Fun Little Breakthrough

Last night I wrote a blog post in which I connected the dots on an idea from more than 15 years ago.

    1. First, here's the blog post link

    Finding A Home For Risk Parity?

    2. Big picture underpinning of my blog

    When I first started blogging in 2004, one way I described it was to be able to look over my shoulder for anyone who was interested as my investment process evolved.

    3. A specific and obvious point

    ETFs first came to be in the 1990's but there were very few of them. Then, after 2000 they began to proliferate with basic exposures with the occasional sophisticated product coming along. It was very obvious that the space would evolve to provide more sophisticated strategies in retail investor accessible funds. This is exactly what has happened over the last 5 years or so at an accelerating rate.

    4. Pros & cons

    To me this development is a net positive. Investors and advisors who invest the time to learn how to use these strategies correctly will benefit immensely. It is human nature though to misuse this sort of thing. There's a potentially hormetic effect here where a little exposure to something sophisticated and complex is a good thing but too much becomes a negative.

    5. Connected the dots

    In writing yesterday's post I thought back to that obvious point and realized, the future is here on this front, the opportunity to build very sophisticated portfolios has arrived. I'm not claiming that I got a prediction correct because if you were there 15 or 20 years ago, this outcome really was obvious.

    6. The future is here

    I've used that phrase on another front too related to successful aging. On quite a few lists here and posts elsewhere I've talked about people making just a couple of good lifestyle decisions when they're young, doing their future selves a favor. Then they get to an age where they start to benefit from those favors. I say all the time, being in your 50's, healthy and having a little money in the bank is a great place to be.

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