Financial writing tip: Don’t ignore the elephant in the room

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Don’t write about something controversial as if it is an accepted fact.

“Research has shown that the most active managers can beat their benchmarks handily,” wrote Eleanor Laise in “The Return of The Market-Beating Fund Manager” in The Wall Street Journal.

Oh, really? Many financial advisors and investment professionals disagree.

Laise should have acknowledged that her statement was controversial. Her failure to do so undercuts the credibility of her article. Keep this in mind the next time you say something that isn’t widely accepted.

Laise could have rephrased her sentence along the following lines: “New research suggests that most active managers can beat their benchmarks handily.”

Research on active managers’ outperformance

Laise’s article alerted me to an interesting research paper, “Active Share and Mutual Fund Performance,” by Antti Petajisto of NYU University’s business school.

Here’s a provocative quote from Petajisto’s abstract:

I find that over my sample period until the end of 2009, the most active stock pickers have outperformed their benchmark indices even after fees and transaction costs. In contrast, closet indexers or funds focusing on factor bets have lost to their benchmarks after fees. The same long-term performance patterns held up over the 2008-2009 financial crisis.

My LinkedIn contacts responded with scepticism when I quoted Laise’s sentence. What do YOU think about the performance record of actively managed funds?


Writing for your readers: A lesson from novelist Michael Cunningham

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Who are you writing for? Answer this question correctly and you’ve taken a big step toward writing a successful blog post, article or other communication.

When novelist Michael Cunningham asks this question of his students, 90% say they write for themselves. Cunningham thinks they’re missing an important point.

“…writing is not only an exercise in self-expression, it is also, more important, a gift we as writers are trying to give to readers,” says Cunningham in “Found in Translation,” an essay that appeared in The New York Times on Oct. 3, 2010.

Read Cunningham’s op-ed story about Helen to gain a better understanding of why and how your reader matters.

I agree with Cunningham’s assertion that for authors “It had better be apparent, from the opening line, that we’re offering readers something worth their while.”

Introducing Susan to marketing managers at investment and wealth management firms

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White papers, articles, and investment commentary are great marketing tools. But it’s not easy for your firm’s experts to find the time—or maybe the skill—to turn their insights into compelling prose. I can help. I can interview your subject matter experts, review research materials, and write a piece your company can publish under its name. If you prefer, I can edit your draft. Or even teach you how to do it yourself.

You may benefit from my writing, editing, or training services if you are a marketer or communicator for

  • Investment managers—especially if you’re marketing to financial advisors
  • Wealth managers
  • Vendors to any of the above

What you want to write–and how I can help

If you are bursting with ideas, I can turn them into

  • White papers
  • Articles
  • Market or investment performance commentary—commentary may be based on interviews or on attribution analysis and other materials provided by you

If you want to write a piece—or improve your draft—you have several options. You can hire me to

  1. Interview your experts and write your piece
  2. Turn source materials you provide into a polished piece
  3. Use a combination of methods 1 and 2

When you contact me, ask for the graphic of my typical writing process. You’ll get a better idea of how we can work together.

 

How you’ll benefit from working with me

  • Your content will attract a bigger audience because the value you provide will be highlighted in reader-friendly text.
  • You receive your finished product quickly and on schedule. Having worked as a staff reporter for a weekly trade publication, I understand the importance of deadlines.
  • You don’t have to explain yourself in endless detail because I understand your industry. I’m a CFA charterholder who can use language as a financial professional and a journalist.

Contact me today to learn more! You can also check my testimonials on LinkedIn.

 

Boost your writers’ skills

Want to help your subject-matter experts and writers deliver better content? Take advantage of my writing workshops. I’ve presented “How to Write Investment Commentary People Will Read” to CFA societies across the U.S. and Canada. I’ve also spoken about “Writing Effective Emails and Letters” and developed customized writing workshops for corporate clients.

This post was updated on Dec., 19, 2013

Reader question: Writing resources for equity research analysts?

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“What are some good resources to improve my investment writing skills with an emphasis on equity research writing?” This question recently arrived in my email in-box.

Here are my suggestions:

I offer customized writing workshops for corporate clients in investment and wealth management. I’m not a research analyst. However, I’m good at analyzing client writing samples and then using them as the basis for training.

Equity analysts, can you suggest any additional resources?

I’m always interested in readers’ ideas.

 

July 24, 2013 update: Warren Miller, CFA, CPA of Beckmill Research, LLC has some more suggestions for you, starting with “Read what good analysts write, and then copy it by typing it into a Word document.” As you re-type that research, study what makes the reports good. That means looking at how the analyst tells the company’s story and at details such as sentence length, transitions, and measures of reading difficulty, such as the Fog Index. As Miller says, “Good writers read great writers.”

Disclosure: If you click on the Amazon link in this post and then buy something, I will receive a small commission. I only link to books in which I find some value for my blog’s readers. – See more at: http://investmentwriting.com/blog/?s=disclosure#sthash.NlvDZLSB.dpuf

May 30, June 3, and June 27, 2014: I updated this with additional links.

Disclosure: If you click on the Amazon link in this post and then buy something, I will receive a small commission. I only link to books in which I find some value for my blog’s readers.

Disclosure: If you click on the Amazon link in this post and then buy something, I will receive a small commission. I only link to books in which I find some value for my blog’s readers. – See more at: http://investmentwriting.com/blog/?s=disclosure#sthash.NlvDZLSB.dpuf

 

 

 

Guest post: “The ABCs of Creative Capital Rights”

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Creative rights are complicated, but every writer and marketer needs to understand them. I’m happy that my friend, writer Wendy Cook, is letting me share her blog post on this topic.

The ABCs of Creative Capital Rights

By Wendy J. Cook

First, let me make myself perfectly clear: I’m not a lawyer. Before you act on any of my personal ruminations here, do please consult an attorney. (1)

That said, as a creator of creative capital, I think I can offer some good ideas from the front lines on frequently asked questions about its ownership, such as:

(1) How can I safely “borrow” from other people’s work?

(2) Should I protect my own work?

(3) What if I’ve hired a freelance writer?

Learning the Alphabet

Let’s begin with a brief tour of the creative lingo.

  • Creative capital is anything you’ve invented (created), that is of some relatively demonstrable value to you and/or others (capital) — whether it’s written content, artwork, a product offering or a process.
  • Copyrights protect your words.
  • Moral rights protect your artwork.
  • Trademarks protect your corporate identities, including logos, taglines and product names.
  • Patents protect your products and processes.(2)

Lawyers the world over are likely cringing at my broad strokes here, akin to using a blow torch to light a candle, but it’s how I think about it all, anyway. Now that we’re in the ballpark, let’s touch on the bases.

Borrowing From Others

No matter how convoluted, laws exist to guide us on what we communally consider fair or foul. So “Do Unto Others” remains a great starting point for drawing on other people’s creative capital. Remember your grade school teacher’s response when asked if you could have a hall pass to escape? “Of course you can,” he or she would smirk. “But may you?”

Same thing with copyrights. Just because you can reproduce an article or a picture does not mean you’re allowed to. Whenever reproducing somebody else’s creative capital (beyond brief, properly cited quotes as described below), it’s your responsibility to proactively seek copyright or moral right permissions from the author or artist — which may justifiably involve paying them for it.

An exception to this rule of thumb is if: (1) you briefly quote and properly cite somebody’s content, and (2) you’re adding substantial value of your own, versus simply repackaging somebody else’s book report.

Protecting What’s Yours

In a perfect world, everybody would respect each other’s creative fields, and you’d need never worry about someone unfairly harvesting the fruit of your labors.

Last I checked, it’s not a perfect world. If you’ve got creative capital that you want to protect against theft, here are some ideas.

Copyrights Have You Covered

Copyrights (and I believe moral rights too) are subject to an interesting characteristic. Authors automatically hold copyright to their work … at least until they choose to sell or grant it elsewhere. That’s whether or not you formally register it with the U.S. Copyright Office or display a notice on it, like: “Copyright © 2011, John Doe.”

So why bother with notices or registration? As I understand it, without these, your legal recourse is limited. For example, should someone violate your copyright when notice and/or registration are lacking, you may still be able to achieve a “cease and desist” order to prevent further offense, but you might have trouble collecting on damages done.

Thus, since it’s cheap and easy to do, go ahead and display a copyright notice on most of your work. Formal registration becomes appropriate if we’re talking book-length or for work that you highly value, but it doesn’t seem worth registering every scintillating word you share, unless you’ve got a whole lot of spare time and money you’re looking to get rid of. (If you do, I’ve got some better ideas; call me.)

Trademarks Are a Different Breed

Trademarks have very different rules from copyrights. My understanding is that you must not only formally establish registered trademarks for your logos, taglines and similar corporate identities, but you must also carefully maintain your ownership, lest it be lost through attrition. Protecting your trademarks requires at least these two important steps:

  1. Including the “®” symbol in almost all appearances of your trademarked content
  2. Regularly monitoring for and aggressively acting on any violations that occur

If you can’t demonstrate that you’ve been diligent on both of these steps, my understanding is that you can lose the ability to protect your trademark — even if you’ve gone through the bother and expense of establishing it to begin with. Ugh.

Bottom line, if it would be a serious blow to your business to lose the rights to your company name and/or particular product names, taglines or similar marks, it may be worth establishing and maintaining trademarks to protect them.

Freelance Writers and Designers

What if you’re working with a service provider to assist you with your corporate communications? As you might expect, the legal transfer of rights can be handled — or mishandled — in all sorts of ways. There are surely enough variations to provide an army of intellectual property lawyers with job security well into the next century. Since there is no universal standard that I’m aware of, whenever you work with creative alliances, it behooves you to ask how they personally handle it and to ensure that their processes work for you.

Personally, I’m fond of the KISS strategy. My practical goal is to transfer the copyrights and moral rights for client-specific projects to the client … once I get paid for doing the work. Brilliant, huh? I contracted a lawyer to help me form a legal agreement that describes this simple goal in copious legal language. Just as good fences make good neighbors, I believe that good formal agreements make for good working relationships. So far, I’m pleased to report my beliefs on that count have held true.

Even though this is one of my longer blog postings, clearly there’s plenty of remaining learning opportunities on the subject of protecting your creative capital and respecting that of others. So I’ll part with a couple of resources I’ve found handy in my own schooling:

Wendy J. Cook Communications offers writing, editing and presentation services expressly for the fee-only, passive/DFA, Registered Investment Advisor community. By focusing on this niche, Wendy helps these firms effectively communicate with their clients, prospects, media and the general public in print, social media/Web and e-newsletter forums.

(1) Lawyers who specialize in these sorts of things are often referred to as intellectual property (IP) attorneys.

(2) Patents are not addressed in this blog but seemed worth a brief mention here.

How to get a white paper written on a budget

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White papers. They’re a great marketing tool for investment and wealth managers. But what if you’re too busy to write and you lack the money to hire someone to craft your white paper from start to finish?

Three strategies suggested by Steve Slaunwhite in his chapter on “Create Your Amazing Buzz Piece” in The Wealthy Freelancer can help.

1.  “Write a very rough draft, no matter how awful.” Then, hire someone to shape up your draft.

2.  Record yourself speaking out loud about your white paper topic. Then hire someone to transcribe your thoughts, which means the person types up word-by-word what you spoke. Another option, which I’ve mentioned in “Investment manager’s secret of regular blogging,” is to use transcription software. Once you have your words in a file, you can edit them yourself or hire an editor.

3.  “Get a freelance writer to interview you.” I’m guessing that Slaunwhite is suggesting that you use the writer’s probing questions to tighten your white paper’s focus before you get the interview transcribed.

Those three approaches get your ideas out of your head and into writing. This is the hardest part for some financial advisors.

Have you tried these techniques? How have they worked for you?

Guest bloggers: 2010 in review

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I’m thankful for the knowledgeable and talented professionals who have contributed guest posts to my blog this year.

Here’s a list of guest posts sorted by topic, including client communications, marketing, social media, and writing.

Client communications

Five Tips for Delivering Bad News to Clients by Kathleen Burns Kingsbury
Talking to clients about social investing by Annie Logue

Marketing

Adding Video into the Communications Mix by Samantha Allen
The Lost Art of the Thank You Card by Suzanne Muusers
My Six Best Marketing Tips for Independent Advisors by Steve Lyons
What’s a tomato got to do with getting your fund discovered? by Dan Sondhelm
Would you like to know how financial advisors are choosing products and making investment decisions in this market? by Lisa Cohen

Social media

Be Compliant When Using LinkedIn Messages by Bill Winterberg
Financial Advisors and Twitter by Roger Wohlner
Generate Quality, Low Cost Leads with Facebook Ads by Kristin Harad
How Seeking Alpha Can Build Your Professional Reputation by Geoff Considine
Investment analysts and social media by Pat Allen

Writing

Correct Grammar Errors in Your Writing Quickly and Easily by Linda Aragoni
Making Research Readable by Joe Polidoro

Forget your spell checker!

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You can’t rely on automated spell checkers. They won’t catch all of your typos.

I remember a beautiful institutional investment pitch book shared by a senior portfolio manager. I’ll call him George Miller. The front cover billed him as “George Miller, Portfolio Manger.”

Yes, that’s “manger” not “manager.”

You can use the proofreading methods in “Six ways to stop sending emails with errors” to complement your spell checker.

The letter reader who’s your biggest nightmare

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If you’re a sloppy letter writer, then my friend’s old employer is your biggest nightmare. But clean up your writing, and you can win over even this tough customer.

The impatient reader

“How do you go through your mail so quickly?” she asked after watching him flip through letters one after another without pausing.

His reply? “If it’s not in the first sentence, I don’t read it.” People who wrote flowery introductions to their letters had no hope of communicating their messages to this impatient reader.

Your solution

You can reach impatient readers by getting to your point in your first sentence. Tell your readers what you want – and why it should matter to them. For example, “Here’s a review of our recent meeting with a checklist of the actions you must take, so I can implement your plan.” Save the niceties for the end of your letter.

Some financial advisors think it’s rude to write a letter that doesn’t “make nice” for the entire paragraph. Indeed, some of your readers may prefer a leisurely, chatty introduction.

However, a letter that immediately gets to the point is kinder to your readers. It relieves them of the burden of searching through your letter to figure out what you want. You’ll benefit, too. More readers will do what you want when you’re clear up front.

Take a second look at your most recent letter. Is it direct enough?

Should you go bold?

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Bold type, which is thicker than regular type, can make it easier for readers to grasp your meaning. This happens only if you bold wisely. Go overboard with bold, and you may lose readers.

When to bold

Here are three ways I’d use bold in a blog post:

1.  Bold your headings or the first part of your numbered lists. I’m a big fan of headings as visual indicators of your main points as well as your shifts from one point to another. This goes for bolding new points on your list, but only when the bolded text is followed by plain text. A whole block of bold text is hard to read.

2.  Bold the key sentence in one or more paragraphs. Michael Katz of Blue Penguin does this well in his newsletter.

3.  Use bold for one key sentence. It could be the eye-catching content that draws readers to your blog post. Or the “call to action” that invites your readers to contact you.

Bold vs. heading format

Your choice of how to highlight your text may affect how well it is picked up by online search engines.

Some folks have told me that any bolded words are given more weight by search engines. On the other hand, Beth Graddon-Hodgson of WriteSourcing told me this only applies to text that is emphasized by a heading tag, so the text is treated as a title. However, this “subject is highly debated,” said Graddon-Hodgson. “Some people believe that ANY changes to text make a difference with SEO since they incorporate different coding.” Check with your SEO expert for the latest opinions on this debate.

Used wisely, bold can boost the impact of your writing. Give it a try!