Connect Portfolios to Markets

Most portfolio managers do not conduct direct investment management research, rather searching and selecting products with attractive stories, limited or transient methodology, high distribution (sales) fees, leverage risk and liquidity risk. Over the years, product distribution and sales firms were called stock brokers, investment advisors, portfolio managers, financial planners, private banks, private clients and most recently wealth managers. Their research method involves survey input and information from and about their investment clients. The allocation of products to clients relates to client circumstances (age, health, financial, family, beneficiary conditions). This misses the important connection between investor circumstances/needs and prevailing market conditions, returns, risk premiums and relative opportunity and risk measurements. Prevailing market conditions inform Mast research for portfolio investment based on those conditions.

Traditional wealth management sales products connect financial product stories to investor circumstances, missing the opportunity to adapt portfolios to market conditions. Prevailing market conditions will not adapt to investor circumstances. That is magical thinking and marketing technique, not investment methodology. Financial markets do not respond to investor needs and wants. Investment management should represent client assets for adaptation to financial markets. Conducting and maintaining independent, meaningful and useful research provides investors with investment portfolios, not product collections.