A blogging buddy could save your blog.

You probably know a financial planner, investment manager, or wealth manager whose blog started off strong, only to peter away after a few months. If you work well with a coach or other outsiders holding you accountable, a blogging buddy can keep you on track.

How it works: Buddies 101

You and your blogging buddy set goals. For example, your goal could be to post weekly to your blog or to draft at least five posts per month.

Next, you schedule regular check-ins with your buddy to report on your progress. You can communicate by phone, email, or whatever works for you.

Often this accountability is enough to keep bloggers on schedule. If it’s not, you can schedule brainstorming phone calls or meetings to break through your roadblocks. Sometimes talking about a problem will help you find a solution.

Taking it to the next level: Buddies 201

Advanced-level buddies give you feedback on your drafts in addition to holding you accountable.

Your buddy’s value depends on their expertise. A fellow financial professional can critique the accuracy of your content. A referral source or prospect can assess how effectively your content communicates their WIIFM (what’s in it for me). A good editor can tweak your grammar, punctuation, and writing style. If you’re lucky, you’ll find all of these skills in one person.

Potential buddy bonus

Find the right buddy, and you may gain a guest blogger in addition to accountability and editorial input. Blog posts from a non-competing financial advisor can relieve the grind of producing compelling posts week after week. The same thing goes for blog posts from professionals in allied fields. In fact, they can even draw more traffic to your blog.

Leave a comment below if you’re a financial planning, investment management, or wealth management professional who seeks a blogging buddy. Perhaps you’ll find a buddy among those who comment.

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Need to write better? Register for my next class on “How to Write Blog Posts People Will Read: A 5-Week Writing Class for Financial Advisors” starting May 16. You won’t get another chance to take this class until 2013.

Receive a free 32-page e-book with client communications tips when you sign up for my free monthly newsletter.

Investment marketers want to know what’s driving financial advisor behavior, so I asked  Lisa Cohen, CEO of Momentum Partners, for a guest post.

Financial advisors, what do you think of the RepThinkTank findings that Lisa discusses? Are you–like the advisors whom she mentions–planning to increase allocations to emerging markets and international stocks?

Would you like to know how financial advisors are choosing

products and making investment decisions in this market?

By Lisa Cohen

We thought you might. We did too. The recently-released first report in the RepThinkTank Distribution Dynamics series provides comprehensive information on investment selection and asset allocation trends. The study includes data from more than 1,000 financial advisors across all channels.

Key findings include:

• Continued commitment to a short list of top managers and families (American Funds, Franklin Templeton, PIMCO), and
• High regard for growing managers including Davis Investment Advisors, Ivy Investment Management, First Eagle Investment Management, and Thornburg Investment Management
• Plans to increase allocations to Emerging Market Equities and International Core, among other asset classes, and to slightly decrease exposure to fixed income
• Changing risk/return expectations and the financial crisis are a top driver of recent changes in the asset allocation of client portfolios
• Advisors’ median allocation across all channels to passive investments is 20%. Data suggests a growing appreciation for using passive investing as both a core allocation and as a way to adjust investor exposure to specific asset classes.
• Use of third party portfolio construction tools by nearly a third of advisors in all channels. In light of advisors’ anticipated increase in use of mutual fund wraps, this data suggests the continued outsourcing of asset allocation.

The complete report is available from any of the RepThinkTank partners and is priced at $7,500. RepThinkTank is an experienced, integrated team of leading financial services research, advisor practice management, and advisory firms. Learn more at www.repthinktank.com. You can contact Lisa at 866-995-7555.

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Need to write better? Register for my next class on “How to Write Blog Posts People Will Read: A 5-Week Writing Class for Financial Advisors” starting May 16. You won’t get another chance to take this class until 2013.

Receive a free 32-page e-book with client communications tips when you sign up for my free monthly newsletter.

Have you ever struggled to report your investment strategy’s underperformance to your clients or customers? Let’s look at what you can learn from how one firm tackled this challenge.

Wasatch Funds’ President Jeff Cardon did such a great job in “Perspective on Performance: Energy Trends and Their Impact on Wasatch Returns” in summer 2008 that I’ve held onto his article, waiting for an opportunity to share with you.

Cardon’s commentary illustrates the approach that I recommend to portfolio managers who underperform.

1. Admit your underperformance. Don’t ignore it and hope no one notices.
2. Put it in context. For example, one quarter of underperformance shouldn’t matter for a portfolio that has consistently delivered positive returns and beat its benchmark.
3. Explain what caused the underperformance. Discuss whether it’s simply a matter of your style being out of favor or you were early into a sector or whether you’ve made some sort of error.
4. Say what you’re going to do about your performance. When your investors believe that you’ve developed a good response, they’re more likely to stick with you.

Let’s look at how Cardon’s article illustrates these lessons.

1. Admit your underperformance

“…in recent periods, we have struggled to stay ahead of our benchmarks,” says Cardon in the second sentence of his article. He’s open about the fact that the fund complex’s products have underperformed. However, the focus of this article, which appeared in the firm’s Summer 2008 newsletter, The Wasatch Advisor,  is to explain why this happened.

2.  Put weak performance in context

Cardon does this by emphasizing his firm’s consistent investment philosophy and process. He also notes, “This strategy has produced considerable success over the years.”

“Through periods of market volatility and changing market trends, our goal at Wasatch remains steady: to deliver good long-term returns using our time-tested, fundamental approach to stock selection,” says Cardon in his first sentence. A key part of how Wasatch seeks this goal, says Cardon, is by “capturing earnings growth.”

Cardon stresses the firm’s success, even in tough times, in capturing earnings growth in its traditional areas of strength: the health care, consumer discretionary, information technology, and financials sectors. “Our thorough and collaborative investment process has continued to deliver above benchmark performance in these core sectors,” says Cardon.

Cardon reinforces this positive perspective on Wasatch’s core capabilities with graphs comparing Wasatch Small Cap Growth Fund’s performance in these sectors vs. that of their Russell 2000 counterparts. Adding a visual element is a good idea because some people absorb information better through pictures than words.

3. Explain what caused the underperformance

So, how could Wasatch underperform if it was doing such a great job in the sectors mentioned above? Because those sectors underperformed the rest of the market, which was led by the energy sector. But energy stocks didn’t meet the firm’s criteria for a good investment. “We clearly missed an opportunity in energy, but we were uncomfortable straying from our investment discipline,” says Cardon.

4. Say what you’re going to do about your underperformance

Acknowledging investor frustration, Cardon says, “If our underweight position in energy leaves you feeling uncomfortable, you may find it appropriate to supplement your Wasatch investment with a targeted investment in the energy sector.”

However, Wasatch is sticking with its investment discipline, says Cardon, because it expects “the market to return to equilibrium.” This gives readers hope for a better future.

Consistently tackling underperformance

Wasatch has another nice, although shorter, discussion of underperformance in its Summer 2010 newsletter (which isn’t online as I write this, or I’d give you a link). Again the firm’s message stresses the consistency of how the funds are managed.

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Need to write better? Register for my next class on “How to Write Blog Posts People Will Read: A 5-Week Writing Class for Financial Advisors” starting May 16. You won’t get another chance to take this class until 2013.

Receive a free 32-page e-book with client communications tips when you sign up for my free monthly newsletter.

Effective writing takes time. This is true even for short pieces such as blog posts. So don’t beat yourself up if you feel as if you’re rowing upstream instead of kicking up wake as you speed ahead.

It took me slightly less than an hour to type, input, and proofread “Poll: “Investable” or “investible”–which spelling is correct?” my Sept. 7 blog post. That’s fast. At least for me.

I was able to write this quickly because I had a plan, which included:

1. Clearly defining my topic as “Which spelling is correct?”
2. Knowing where I’d do my research–I would pull references off my bookcase and do Google searches
3. Having a structure in mind: First, the case for one spelling, then the case for the other spelling, and finally asking for readers’ opinions–This structure would work no matter what my research showed

These tips also helped me to create 31 posts for my May 2010 Blogathon. I posted daily to my blog for an entire month, including a 10-day vacation.

What plan do YOU use to speed up your writing or blogging? If you lack a plan, then sign up for “How to Write Blog Posts People Will Read.” You’ll learn a powerful process for writing blog posts.

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Need to write better? Register for my next class on “How to Write Blog Posts People Will Read: A 5-Week Writing Class for Financial Advisors” starting May 16. You won’t get another chance to take this class until 2013.

Receive a free 32-page e-book with client communications tips when you sign up for my free monthly newsletter.

Can you identify the error?

The picture shows the subject line of an email that I’ve edited to hide the identity of the guilty typist. It includes the kind of error that a spell checker won’t catch. Even Microsoft Word’s grammar checker didn’t catch the typo when I tested the complete sentence.

Proofreading is essential, if you want to avoid embarrassing yourself in your financial blog or other written communications. Tips for effective proofreading are included in “How to Write Blog Posts People Will Read: A 5-Week Teleclass for Financial Advisors,” starting Sept. 23.

If you think typos don’t matter, read some of the comments this typo drew from my social media friends.

• Oooh…That makes me not want to open that e-mail at all.
• That kind of mistake makes me nuts.
• Ouch!

In case you couldn’t identify the error

The subject line should have read “See who’s speaking this fall….”

Gosh, I hope I didn’t let any typos slip through in this post.

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Need to write better? Register for my next class on “How to Write Blog Posts People Will Read: A 5-Week Writing Class for Financial Advisors” starting May 16. You won’t get another chance to take this class until 2013.

Receive a free 32-page e-book with client communications tips when you sign up for my free monthly newsletter.

SeekingAlpha.com looks like a great way for investment professionals to share their opinions and market themselves. So when I met Geoff Considine and learned he’d done exactly that, I asked him to guest-blog about his experience.

How Seeking Alpha Can Build Your Professional Reputation

by Geoff Considine

Writing for SeekingAlpha.com has helped me develop my professional reputation and gain attention for my quantitative modeling software and consulting services. Financial professionals can build a substantial brand from SeekingAlpha.  Quite a few writers, advisors, consultants, and others have developed enormous reach on the basis of SeekingAlpha.  I am certainly not even among the most successful.

If I can do it, so can you, especially if you follow the six rules I give at the end of this article.

My experience publishing on SeekingAlpha.com

I have been writing for SeekingAlpha.com since January 2006.  At that time, I had fairly recently launched a software tool for financial advisors and individual investors and I was trying to drum up some attention.  All in, I have written 127 articles on SeekingAlpha.com, even though I have not written for them since September 2009.  I have written a lot over the last year, but I have developed a sufficiently deep audience that I have only been writing for advisor-focused publications such as Advisor Perspectives.  I am quite confident that I never would have been able to write for these professional publications without the experience and reputation gained from writing for SeekingAlpha.com.

Quantext, my small company, gets about 100,000 hits a month on its website in a good month.  I sell software and e-books, along with doing consulting on analytical models for portfolio management and asset allocation.  The only marketing that I have ever done for my business is writing—and SeekingAlpha.com was the only place that I published articles (aside from my own website) in the first couple of years of building out the software side of my business.

Once something is published on a site like SA, people will go back and look at what you have said in the past—it’s a fairly permanent record.  This can be great when your thinking is validated, but can pose reputational risk if you make some outlandish statement.  Back in 2007, for example, one of The Motley Fool’s best-known columnists came out and said that he risk measures such as Beta and volatility just didn’t matter at all, not matter what all the academics say.  His timing was very unfortunate.  Investors who ignored standard risk measures are likely to have suffered disproportionately large losses in the subsequent decline.  This type of reputational risk is quite easy to avoid if you stay away from making assertions in articles that strain common sense or that fly in the face of all standards of practice.

One of the ways to build credibility with articles is to identify thought leaders with whom your thinking is consistent.  One of my early articles looked at Berkshire Hathaway’s portfolio using my portfolio analysis software.  My software identified a number of ways that Berkshire’s portfolio looked very attractive.  If my analysis had suggested that Warren Buffett didn’t know what he was doing, I would have had something of a problem.  I have also analyzed portfolios and strategies proposed by David Swensen (head of Yale’s endowment), Mohammed El-Erian (co-head of PIMCO), and Jeremy Grantham.

The previous paragraph notwithstanding, I am not suggesting that writers steer away from controversy.  If you can make a really solid case for a contrarian theme and publish it in an open forum, you can really stake out territory for your thought leadership.  One of my major early themes that I wrote about in 2006-2007 was that there were a number of really robust reasons to believe that market volatility would skyrocket.  This theme in a number of my SA articles got the attention of an editor at Kiplinger’s and resulted in an interview that appeared in the magazine in early 2008.  As the market conditions have evolved, my writing on this theme has continued to get me very positive attention.

If SA is so great, why don’t I publish much there anymore?  The answer is that I have found that my audience is mainly professional advisors, there are better publications to reach this targeted audience, and I get paid to write these days.  There is a significant opportunity cost for me to write a piece for SA.  If I have more time on my hands in the future, I would certainly put more pieces in SA.

How YOU can thrive on SeekingAlpha.com

There are a few guidelines that I would offer for financial professionals who want to use Seeking Alpha to develop their professional brands:

1)     Make sure that you have something to say, and good arguments to support your ideas

2)     Craft your writing carefully

3)     Use feedback on your articles to develop your writing style

4)     Respond to comments—be an active member of the community

5)     Write regularly and consistently

6)     Learn your special niche

Seeking Alpha can be a powerful channel for reaching your audience, but you need a long-term strategy for how to tap this channel.  If you simply plan to write one article, SA won’t do much for you.  If you write a consistent series of articles that is well articulated and make sense, SA can be enormously powerful.  When I started writing there, I thought of SA as a somewhat narrow channel for getting my ideas out there.  Whether or not I was correct then I am not sure, but this is certainly not the case today.  SA has enormous reach.

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Need to write better? Register for my next class on “How to Write Blog Posts People Will Read: A 5-Week Writing Class for Financial Advisors” starting May 16. You won’t get another chance to take this class until 2013.

Receive a free 32-page e-book with client communications tips when you sign up for my free monthly newsletter.

“When people give you their business cards, you’re in a relationship, so you can add them to your e-newsletter list.”

Photo by Almoko

I disagree with the statement above. But I’ve heard it from many people.

Technically speaking, you may not violate the CAN-SPAM Act if you email everyone who gives you their card. But, in my opinion, you’re violating the spirit of the law. You’re also making me unhappy.

I use two techniques to keep my conscience clean.

When I meet people, I ask if I can add them to my e-newsletter distribution. I tell them they may enjoy the newsletter’s tips for client communications and articles on investment and wealth managers. For prospective clients, the newsletter is a gentle reminder of my availability, so they can find me once they need a writer.

If I obtain an email address, but forget to discuss my newsletter, I send an email asking if they’d like to subscribe. I include a link to a sample issue.

Rather than force people to sign themselves up, I offer to do it for them. “Just hit ‘reply’ to this message and send me an empty email. I’ll add you to my distribution.” This is a technique I learned from Andrea Novakowski, a coach. Interestingly, most people write a brief message in reply to my newsletter subscription offer.

Maybe I’m too conservative. I don’t automatically add my clients to my newsletter distribution. I treat them as I’d like to be treated.

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Need to write better? Register for my next class on “How to Write Blog Posts People Will Read: A 5-Week Writing Class for Financial Advisors” starting May 16. You won’t get another chance to take this class until 2013.

Receive a free 32-page e-book with client communications tips when you sign up for my free monthly newsletter.

A printed book is sometimes the best place to find a solution to your question about writing style, punctuation, or grammar.

Here are my five favorite reference books.

1. Edit Yourself: A manual for everyone who works with words by Bruce Ross-Larson. Everyone should own this small, inexpensive, easy-to-use book. I use Part II, the back of the book, the most. It lists troublesome words in alphabetical order. It’ll help you cut pretentious words and resolve problems such as deciding between “which” and “that.” Part I describes and offers solutions to problems common in everyday writing. Buy it today!
2. Words into Type, based on studies by Marjorie E. Skillin, Robert M. Gay, and other authorities. This fat classic from 1974 is still my second “go to” reference book when I’m flummoxed by a question of style, punctuation, or grammar. I go straight to the index to look for the word or type of problem. The book is aimed at individuals preparing manuscripts for publication.
3. The Chicago Manual of Style was my favorite reference book for many years. It’s the most academic of the books on this list. You can also subscribe online to the manual and follow it on Facebook or Twitter.
4. The Associated Press Stylebook. If you’ve ever heard an editor say, “We follow AP style,” they’re talking about the print or online edition of this style book. There’s even an iPhone app for this guide. If you’re geeky enough–like me–to consider owning multiple style guides, you may enjoy the sarcastic, not-to-be-trusted FakeAPStylebook Twitter account, in addition to the Twitter account of the real thing.
5. The Grammar Bible by Michael Strumpf and Auriel Douglas. This book gives plain English explanations of vexing issues of grammar and more.

Honorable mention

• Garner’s Modern American Usage by Bryan Garner. This book runs over 900 pages in length, so it covers just about any question you may ask. But it’s so darned technical I only turn to it as a last resort.
• The Elements of Style by William Strunk and E.B. White. If you care about good writing, you should read this classic at least once. An early edition is online at Bartleby.com.

If you’re passionate about good writing, you’ve probably got a favorite reference that I’ve overlooked. Please tell me about it.

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Need to write better? Register for my next class on “How to Write Blog Posts People Will Read: A 5-Week Writing Class for Financial Advisors” starting May 16. You won’t get another chance to take this class until 2013.

Receive a free 32-page e-book with client communications tips when you sign up for my free monthly newsletter.

How should you spell the word that may appear in descriptions of an asset management firm’s minimum requirements for clients– “investable” or “investible”?

My gut tells me “investable” with “a” because the definition depends on how much you are able to invest.

The case for “investable” over “investible”

1. Merriam Webster’s Collegiate Dictionary includes “investable,” but not the alternative spelling.
2. Garner’s Modern American Usage calls “-ible”  “dead as a combining form in English,” while “-able” is a living suffix that may be added to virtually any verb without an established suffix.”  It includes “investable” among “some of the hundreds of adjectives preferably spelled -able.”

The case for “investible” over “investable”

1. Google turns up about 393,000 references to”investible” vs. only 320,000 to “investable.”
2. Fowler’s Modern English Usage says “The -ible form is the natural one for words derived from Latin verbs ending -ere or -ire, making adjectives in -ibilis.” I don’t know about “making adjectives in -ibilis,” but lo and behold, my dictionary says the word “invest” comes from the Latin investire. However, my copy of Fowler’s dates back to the 1960s.
3. The Financial Times Lexicon goes with “investible.” Could this be a British thing?

The SEC is a draw

A search of the SEC website yielded an equal number of results for both spellings. I wonder if they use both as key words for search purposes.

Please answer the poll in the right-hand column of this blog

Which do you prefer? Or would you rather avoid the word entirely? Some argue that it’s better to say what you mean instead of hiding behind a vague word like this one.

Please answer my poll in the right-hand column in the right-hand column of this blog. You’ll need to scroll down below “Recent Posts.” The poll will run until I put up next month’s poll.

I’ll report the results in my October e-newsletter.

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Need to write better? Register for my next class on “How to Write Blog Posts People Will Read: A 5-Week Writing Class for Financial Advisors” starting May 16. You won’t get another chance to take this class until 2013.

Receive a free 32-page e-book with client communications tips when you sign up for my free monthly newsletter.

Investment professionals and financial advisors are familiar with the Morningstar style box, which categorizes stock funds by market capitalization and style. A recent CFA Magazine article made me wonder if Morningstar should turn the style box into a style cube by adding a third dimension: quality.

Stock quality may overwhelm size and style

Quality counts for just as much as size and style.

That’s according to Brian Smith, director of institutional services and principal at Atlanta Capital Management, in “3-D Investing” in the Sept.-Oct. issue of CFA Magazine. The CFA Magazine article is based on a longer white paper, “The Third Dimension: An Investor’s Guide to Understanding the Impact of ‘Quality’ on Portfolio Performance.” To access the original white paper, click on “Publications” in the left-hand column of the Atlanta Capital website.

“…our research indicates that ignoring quality and investing solely by capitalization and style dimensions is unwise. In fact, the performance of high- and low-quality stocks can have a significant influence on an investor’s risk and return characteristics, in many cases overwhelming the influence of either size or style,” writes Smith in his CFA Magazine article.

I wondered if there might be something other than quality at work.  Could one style be more associated with quality than another?

Smith notes in the white paper that certain value and growth styles are sometimes associated with high- or low-quality stocks. “Conservative growth” and “relative value” tend toward high-quality vs. low-quality for “absolute value” and “aggressive growth,” he says. Smith refers to this as a “hidden quality bias.”

Smith compared returns by quality, size, and style using Russell indexes and custom benchmarks based on the Standard and Poor’s Earnings and Dividend rankings. Looking at 2009 returns, he found that “Clearly, each size, style, and quality index responded differently to the same economic stimuli….”

In other words, the correlations among the quality, size, and style indexes were weak.

The “quality cycle” in the stock market

Smith suggests that a “quality cycle” exists because fluctuations in the performance of high- and low-quality stocks are associated with the economic and stock market cycle. Low-quality stocks briefly outperform high-quality stocks at both ends of a market cycle. This is probably because they’re more sensitive to the economy, the availability of credit, and investor speculation. High-quality stocks win the rest of the time.

Smith concludes,”If history is a guide, high-quality stock should post stronger relative returns in 2010 and 2011….”

Do you agree? You’ll probably want to read more of the CFA Magazine article or Atlanta Capital white paper before you decide.

_______________________________________________________________
Need to write better? Register for my next class on “How to Write Blog Posts People Will Read: A 5-Week Writing Class for Financial Advisors” starting May 16. You won’t get another chance to take this class until 2013.

Receive a free 32-page e-book with client communications tips when you sign up for my free monthly newsletter.