The investing industry has seen major changes throughout the years. From Wall Street to the dot com bubble and everything in between, investors have had to toe the line carefully between risk and reward.
John Hailer, the former CEO of Natixis, recently took to the press to discuss some of the big changes he helped to foster in the investing field. As the current Chairman of the Diffractive Managers Group for the 1251 Capital Group out of Boston, Hailer’s words have particularly keen insight to offer future investors.
Let’s pull out our magnifying glass to better understand Hailer’s role in the growth and evolution of how we approach portfolio construction.
Patience and the Long Game
A recent glance at the investing landscape in the wake of the crypto boom would have most investors believing that their riches are just around the corner. Unfortunately, or fortunately depending on your perspective, investing is more of a patient and long-lasting game.
Hailer said, “it’s easy to tell investors that they should focus on the long-term. But as an industry, we need to get better at building the types of investment portfolios that help investors get there.”
While operating at Natixis, John Hailer would take this mission statement to heart and he would be charged with coming up with a solution to help investors in the future. Hailer said, “You can’t time the market and you can’t sit out a downturn.”
Hailer added, “It’s pretty clear that the biggest risk most investors face is themselves.”
Knowing that patience and risk factors are two of the biggest causes of failure in the investing field, Hailer had an idea that would fundamentally shift the industry in an entirely new direction.
Industry Disruption Through Free Portfolio Analysis
Understanding risk and evaluating it in real time are two very different concepts and they both rely upon education. To help investors prosper without putting them on the line, Hailer would help foster the growth of the Durable Portfolio Construction Research Center (DPCRC).
The founding of the DPCRC revolved around providing clients with free access to investment professionals who operated on a product-agnostic approach, focusing instead on strategies that were right for their clients even if it meant working with a competitor.
Hailer took serious grief over the development of the Durable Portfolio Construction Research Center, repeatedly getting bashed for offering a free service that would advise competing funds.
Hailer said with some satisfaction, “But we showed that helping clients become better fiduciaries and helping them remain relevant in various market conditions built a lot of trust. Trust is the backbone of all long-term successful businesses.”