Weekend reading: The $35 billion passive man

Weekend Reading logo

Good reads from around the Web.

Have you ever tried to convince somebody they should invest passively with just a few funds? You’ll discover an interesting new way to bang your head against a brick wall.

Some people get it right away. It helps to have Monevator articles – and those recent videos from Lars – to send them to.

But very often they tell you (or you can see that they think) you’re short changing them.

It can’t really be so simple. Do you believe they’re not smart enough to invest properly? Rich enough? Ambitious enough?

Worth it?

Adding to the problem with my friends is that many know I’m a market mad investing nut job.

What am I holding back?

If it’s good enough for Nevada…

Happily, reader S. pointed me to an article in the Wall Street Journal [Search result] that may become a powerful part of my passive persuasion arsenal.

Because if my friends are worried I’m suggesting their £15,240 ISA isn’t worth “proper” investing, maybe they’ll be reassured by seeing somebody invest $35 billion using passive principles.

As the chief investment officer for the Nevada Public Employees Retirement System, Steve Edmundson works in a one story building and has no co-workers. He brings homemade lunch to work in a Tupperware box – often last night’s leftovers. He keeps spare paper clips in a tin.

And – even more like a switched-on seeker of early retirement than a Master of the Universe – he invests all his $35 billion under management passively, having fired 10 external managers when he took the job in 2012.

The strategy is doing the business, of course:

Returns over one-year, three-year, five-year and 10-year periods ending June 30 bested the nation’s largest public pension, the California Public Employees’ Retirement System, or Calpers, and deeply-staffed plans of many other states.

…although it does go a bit Monty Python:

With no one else on his investment staff, Mr. Edmundson rarely uses his conference table and four extra chairs. He volunteered his office to pension-fund employees who work for accounting or benefit calculations.

Last month, a wall went up dividing the room.

“I’m not going to complain about my office,” he says. “It was too big.”

When people write articles ‘fearing’ the shrinking of the wealth management industry due to the rise of index funds, remember Mr. Edmundson – and all the expenses paid to his colleagues who mostly added little value while earning sports cars and country homes with our money.

Thanks for reading, and have a great weekend!

From the blogs

Making good use of the things that we find…

Passive investing

Active investing

Other articles

Product of the week: Banks and building societies are culling their Best Buy saving rates – and they weren’t much cop to start with. ThisIsMoney says National Savings & Investments is now a table-topper, thanks to a mere 1% interest rate. Your cash is 100% guaranteed by the government with NS&I, too. But I’d expect its rates to be cut pronto if money starts flooding in.

Mainstream media money

Some links are Google search results – in PC/desktop view these enable you to click through to read the piece without being a paid subscriber of that site.1

Passive investing

  • A review of robot money managers in the UK – Telegraph
  • Swedroe: Why do people actively reduce their wealth? – MutualFunds
  • Commodities are not a good inflation hedge [US but relevant]Forbes
  • The dying business of picking stocks [Search result]Wall Street Journal

Active investing

  • Gilt yields are rising. What does it mean? – ThisIsMoney
  • Could bond funds close their doors on a “rush” of withdrawals? – Telegraph
  • Five inflation-beating dividend stocks [Dropbox/PDF]Master Investor
  • Investors are using passive for active – Bloomberg

A word from a broker


  • London after Brexit: What will happen to the UK capital? – Bloomberg
  • Pound below worst ‘Project Fear’ projections – ThisIsMoney
  • Immigration myths collide with reality in austerity Britain [Search result]FT
  • Last ditch attempt to save EU-Canada trade deal – BBC
  • Inflation hits two-year high, cash savings shrink in real terms – ThisIsMoney
  • Can you identify these rival currencies and their fortunes? – ThisIsMoney
  • Venezuela, Sierra Leone, and Angola: Bargains for Brexiteers [Search result]FT

Other stuff worth reading

  • When (and where) the 4% withdrawal rule failed – Morningstar
  • Re-branding investing for millennials – Bloomberg
  • Property is theft? Well, leasehold certainly is – Guardian
  • Make your house airtight to slash your energy bills – Guardian
  • Loneliness often follows sudden wealth – BBC
  • Men need help. Is Hilary Clinton the answer? – New York Times

Book of the week: It’s worth visiting Amazon’s Echo Dot product page just to watch the demonstration video. Sci-fi has never seemed so Made In Surbiton! But I’m convinced it (voice-control) is the future.

Like these links? Subscribe to get them every week!

  1. Note some articles can only be accessed through the search results if you’re using PC/desktop view (from mobile/tablet view they bring up the firewall/subscription page). To circumvent, switch your mobile browser to use the desktop view. On Chrome for Android: press the menu button followed by “Request Desktop Site”.

from Monevator http://monevator.com/weekend-reading-the-35-billion-passive-man/


Author: Frozen Pension

Our aim when we set up was to help people like you track down their frozen pensions with the greatest of ease. Tracking a lost or frozen pension can often be a complicated process for people who are unfamiliar with the system, and we realised that we could provide the help and expert support that people need.

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