Aurum Wealth Management Blog


Ready For The Pitch

After 22 wins in a row for the hometown Cleveland Indians, who doesn’t have baseball fever? The Tribe breaking the American League record that stood for 15 years- and then the all-time record- was off the charts for even the stat-heads.

It is easy to take for granted the difficulty of the feat these guys achieved over three weeks. Many people say the hardest thing to do in sports (next to pole vaulting!) is hit a fastball. Well, the Indians just hit fastballs for 22 straight games.

Imagine it if the average person were in the batter’s box. I know I would jump back ten feet if a 95 miles-per-hour pitch came whizzing by.

Here in our world, though, we have different sorts of pitches we take every day.

When someone pitches an investment, many people’s first thought is, “How much will it make?”

Sure, that is important. But we like to take the long road before we get around to asking that question. We like to ask two preliminary questions.

  1. Why am I so lucky that I am getting this opportunity? Surely, there are plenty of other investors and institutions that would love to fund this deal/strategy/idea, right? It reminds me of the quote from comedian Groucho Marx, “I don’t care to belong to any club that will have me as a member.”
  2. What could possibly happen that would make this investment go sideways? If it can go up, it surely can go down. How will this most likely happen? As Warren Buffet said, “Rule #1 is don’t lose money.  Rule #2 is don’t forget the first rule.”

As a firm that focuses on financial planning on behalf of individuals and families, we get more than our fair share of marketers wanting their products included in our client portfolios. Thursday of last week, which was pretty average, our firm received e-mails and phone calls on the following investments.

  • Municipal Bond ETF
  • Global Macro Allocation
  • Emerging Markets Fund
  • US Large Cap Smart Beta ETF
  • High Yield Bond ETF
  • Special Situations Asia Private Equity Fund
  • Credit Hedge Fund
  • Short-Term Municipal Fund
  • Global Equity ETF
  • Global Macro Currency
  • US Large Cap Growth Funds
  • Insurance Linked Securities
  • US Long/Short Equity
  • Europe Long/Short Equity
  • MLP Fund
  • Alternatives Placement Agent
  • Multi-Family Real Estate Fund
  • Industrial Real Estate Fund

Multiplying these 18 inquiries times 250 weekdays per year, equals 4,500 investment product contacts each year! And this doesn’t even include the market updates from large asset managers!

How to wade through all of this information?

We have a defined philosophy, implementation, cost analysis, and process we look for in managers across asset classes and strategies. We have our own databases to comb through when starting a search from scratch.

Just because it is marketed does not mean it is good. It does not mean the timing is right to buy. Often, it is quite the contrary. Most managers seek to market the funds only after a period of out-performance.  Simply, performance sells.

The pitches we receive are not all bad. At the very least, we can gain market insights, or test our own thesis of current investments. Occasionally we will find the needle in the haystack, or that fastball right down the middle of the plate.


This material is based on public information as of the specified date, and may be stale thereafter. Aurum Wealth Management Group has no obligation to provide updated information on the securities or information mentioned herein. Actual events may differ from those assumed and changes to any assumptions may have a material impact on any projections or estimates.

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