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Chuck Jaffe: You Are Probably Way Too Optimistic About Your Investment Returns
Not only are investors far too optimistic of the level of near term return likelihoods, but their financial advisors are too optimistic also. It is not likely that the average portfolio will deliver the 5.9% returns over inflation that the professional advisors are currently projecting.
Given our low GDP growth rate of about 1%, the odds are against the good times that our advisor class is forecasting. The current GDP and irs coupled productivity growth rates are more than two times below our historical average. The other contributor to annual returns, the market's P/E ratio level, is far above its historical average, so the most probable direction for that contributor is downward, a regression-to-it's-mean movement which will subtract from returns.
Both these returns factors suggest muted near term equity returns, not necessarily negative, but perhaps a factor of two below the historical returns. This forecasting method, which has long been advocated by John Bogle, is not highly accurate for any given year, but it does a very respectable forecasting job over a timeframe like a decade.
According to that returns equation, expect muted equity returns, even below those endorsed by the reported financial advisor wizards. Retirement dates might need to be delayed for those assuming near historical equity market returns. That's not a high probability future. Sorry about that, but that's the way the cards are likely (never a guaranteed outcome) to play out in the next decade.
Who exactly are these "investors" who expect inflation + 8.5%? None around here, for sure. Sounds like more typical BS from Jaffe.
Who exactly are these "advisors" who expect inflation +"5.9%"? I just love pseudo-exact numbers like that in a context like this one. Not roughly 5.5%, not roughly 6%, but exactly 5.9%. Sorry MJG- just more BS.
Every responsible advisor that I've noticed in the last couple of years is using 4%, and that with some caution.
We seem to be in complete agreement that both investors and their financial advisors are likely overly optimistic with respect to portfolio returns in the next decade. According to the surveys, financial advisors attempt to dampen the enthusiasm of their clients. That's probably a good policy. Realism is always superior to wishful optimism.
We part ways when assessing the worthiness of the Jaffe article that was referenced. It is not BS. To summarily discredit the article as BS does a disservice to Chuck Jaffe, to the company who conducted the surveys, and to the MFO membership.
Jaffe has been a respected and widely recognized financial writer for decades. He would never risk compromising his reputation by inventing statistics or referencing a faulty survey. He did not do so in the current article.
Jaffe relied on statistical data collected by an outfit (Natixis) that frequently does worldwide financial surveys. Typically their surveys question over 7000 individual investors and/or over 2000 financial advisors. These surveys are conducted in double digit countries.
You might not trust surveys. That is your choice. But the surveys seem to be very well designed and honestly conducted.. Before assigning the BS perjorative to Jaffe and the Natixis Global Asset Management firm, I suggest you visit the two Links that are now provided:
Perhaps these documents might soften your strong opinion. I hope so. Neither Jaffe nor Natixis deserve your BS judgment. You may not believe the survey results, but they are the results.
"According to the Natixis study, investors currently expect returns of 8.5% on top of inflation."
Geez: What study was that? I missed it. None of my fund houses ever asks me that question. I wouldn't answer them if they did. The way I see it, it's their job to run the fund to the best of their ability according to the mandate given them in the Prospectus. I'll live with the results.
A word on Natixis. They are a French investment company and owner of several global fund groups, including U.S. based Harris Associates which operates the Oakmark Funds. I suspect (but can't confirm) that their study covered investors in many different global markets - some with much faster growing economies and a correspondingly less experienced retail investor class than the U.S. ---
"Pat Dwyer of Merrill Lynch says the firm thinks we are still in the early stages of a secular bull market. Healthcare stocks will do particularly well, he predicts."
This is from the same article, but seems to contradict the author's broader argument. ---
"Investors are optimistic about returns; they have high hopes for what they can achieve,” said David Goodsell, executive director of the Durable Portfolio Construction Research Center at Natixis Global Asset Management."
Hope is not a plan. (I guess this supports what the author is trying to establish.) ---
"This level of expectation is a recipe for disappointment, even if the market winds up with gains. It’s a reason to be dissatisfied with an adviser, even if he or she delivers the 6% return that person thinks is realistic."
Seems to me this type of thinking puts the cart before the horse. I'm inclined to decide first on a prudent allocation to various assets, based on age, time frame, risk tolerance and the purpose for which the money is invested. Once so allocated, I'll take whatever return the market provides. Nobody can predict markets. However, if folks are expecting 5-6% above inflation year after year - I'd say they'd need to be pretty far out on the risk spectrum to achieve that consistently. Not impossible to achieve - but not an easy goal either.
>> Perhaps these documents might soften your strong opinion. I hope so. Neither Jaffe nor Natixis deserve your BS judgment. You may not believe the survey results, but they are the results.
MJG, I just know you are gonna say you read the durableportfolios link you provided, but ... did you read it?
The Jaffe link is a photo and bio fluff and whatnot, no merit to be inferred from it particularly, and his MW article is indeed at the level of his sometime bullshit (other of his work has substance, sure).
Was he referring to some other 'study'?
The pdf at the link you provided is even worse bullshit because full of rah-rah for advisers and tips and hints and other investor-meaningless text. Try doing a search for 8.5 or 5.9 within it. Maybe you meant to point to some Natixis study? Or some other study? If not, and you read it, suggest rereading.
Your post has more than a small touch of bitterness. It also has the feel of desperation; the feel of a violent Kamikaze attack. That's too bad since better investment outcomes are more likely if learning and decisions are made in an unemotional way.
Yes, indeed I did read the two references that I posted. You often challenge me in that dimension, which is yet another measure of your bitterness directed at me. I assure you I am not hostile to anyone on MFO. I mostly post for educational purposes.
It was for educational purposes that I posted the two Links that you criticize. I especially referenced the Natixis PDF because it was a nice review of their baseline survey methodology. It was not the survey paper that Jaffe referenced. I extracted the rough number of investors and financial advisors generally surveyed from that review document. One objective of the Natixis work is to help advisors provide more useful service to their customer base.
You certainly should express your opinion on any topic posted on MFO. Your standards are not the same as mine. I'm sure each MFOer has his own set of standards. Hooray for those differences and the freedom to express them, hopefully in a friendly and constructive manner.
Recall what Marcus Aurelius said: "Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth." That quote is particularly insightful when discussing investment matters.
Don't judge me, or others, pious dude; you post junk, often, not always, but then always always always attempt the high-road tone. Cite the survey. Be substantive. Stay on message.
I don't mind being foolishly condescended to by any elder, I am plenty ignorant, I welcome instruction, but you lack substance waaaay too often.
Aurelius's quote is crap, and was even back when, but we all know you like to tone it up at the end of your piety. Instead, see if you can circle back to how the CJ article was not bullshit, okay? Then maybe you can try and waggle your finger at me and others yet again. Bitter, desperate, violent, please, lolz. You sure do not like being called out, do you?
Sometime practice appropriately saying 'Oops, my bad, you guys are right, it was indeed thin gruel and small beer.' I won't judge and characterize your presbyter views, promise.
There's probably less of a story here than what it appears. I bet the survey is skewed towards people who are saving for a retirement that is years away. Retirees likely would not give the same answer if they have shifted to a lower risk profile because they couldn't square such a high real return forecast with the reality of today's interest rate regime.
One of the links MJG provided (and on which Chuck Jaffe's article appears based) is to a Natixis publication clearly intended for financial advisors. It draws from findings included a survey of 2400 financial advisors worldwide. The survey was commissioned by Natixis and conducted during June and July 2015 by CoreData Research. Of the 2400 advisors queried, only 300 were from the U.S. Here's the link again: http://durableportfolios.com/docs/593/246/Global Financial Advisor Survey Whitepaper_2015 archived_final.pdf
Natixis did not conduct the underlying research, nor does the linked publication include the raw research findings. What you are seeing is a glitzy, possibly slanted, promotional piece designed to enhance Natixis's business and assist its network of commission-based advisors. It's therefore hard to evaluate, since it isn't directed at retail investors, but, rather, to the advisors who offer, promote or sell Natixis funds. https://ngam.natixis.com/us/by-price-and-performance
Jaffe appears to be in error in calling his source a "study" - as most would understand that term. Nor, I'll argue, should his source be termed a "survey", since Natixis did not conduct the survey. More appropriately, what one gets here is Natixis's interpretation of a survey conducted by someone else.
For purely illustrative purposes, here's some phrases contained in the the Natixis publication which do not comport with how a scientific study should/would have been written:
"... a perfect storm" "... where the rubber meets the road" "... plenty of fodder to fuel a heated debate"
I wouldn't drive across a bridge for which the engineering study of structural integrity contained such vernacular/vague terminology.)
Natixis's "conclusions" are listed at the end of the publication. They might best be viewed as both guidance and suggested talking points for financial advisors.
--- Put risk first. --- Maximize diversification. --- Use alternatives. --- Make smarter use of traditional investments. --- Be consistent.
(I suspect MJG, and many others here, here would agree with some, but not all, of the above recommendations.)
@hank Very well done. The clean and crisp air in your area has your brain cells in top form. I started a draft of some thoughts; but you covered the needed turf regarding the article. Appears to be marketing to me, too; and very much lacking on in depth facts to support the "marketing". Have to get in gear outside before the freeze and snows start. Take care, Catch
Could be either or both, depending upon how well the advisors surveyed actually performed for their customer base; as the Natixis whitepaper is apparently directed at a captive crowd of company connected advisors. I did read that "alternative investments" seem to be on the "next or current" hot plate of places for money to travel; if the client is in the $1-4 million dollar portfolio arena. If and when an investment advisor can provide a true document to me of how they performed for portfolio type "x", over the past 10, 5 and 1year time frames, that would have been or is suitable for me today, I'll listen. The most simple baseline would be to compare against the inexpensive VWINX.
Below in bold, from the 2015 whitepaper linked prior:
Investment Pragmatist: More than three-quarters of advisors believe that a traditional stock and bond portfolio is no longer enough to effectively manage risk and pursue returns. Fortunately, continual innovation has provided access to new asset classes, new pricing structure and new portfolio tools, allowing advisors to make practical decisions about which tool will best fit client goals and investment objectives. I wish these folks (advisors and clients) well with the alternative path.
The below fund link at about 40/60, equity/bond over the long term. Pick your own equity/bond mix, a built your own, eh? My own caution note for such a mix is that some bond types may blow up at any time, and I would always advise to be observant. 'Course, folks here are always paying attention, yes? And don't forget that the death of the 30+ year bond market bull continues to be issued by someone, somewhere; one would suspect. I recall its imminent death announcement here several years ago (the thread exists somewhere, eh?), but I don't have time for search; although I recall Mr. Snowball was involved in the discussion).
Lastly, I have had several pre-Halloween treats today; in order to sample the quality of what we will distribute to the young ones. Hopefully, this has not affected, greatly, my ability to think or write. 'Course, in reading this before posting; I sound a bit arrogant, eh? Well, I know I am as smart and do as well as some financial advisors on this planet. Sincerely and respectfully, Mr. Catch
I certainly do agree with much of what has been posted on this exchange, especially your last posting. On this topic, with the same prime time players (Jaffe, Natixis), this is the second time around the horn for you. I'll provide a Link a little later.
Just like no financial advisor is created equal, no financial writers are created equal either. And separate columns composed by each writer are not equal. Brilliance is hard to maintain on any timescale.
This Jaffe column might not belong on the brilliant side of the scoring, but it is not a dud either. Jaffe has been using the Natixis work for a long time. For example, you commented on a similar column about two years ago. Here is the internal Link to the column and your comments:
It is not surprising that Natixis uses a hired firm to conduct their surveys. That's a common practice. We do the same when we hire mutual fund managers to fill our portfolios with companies of their choosing. Nothing unusual about interpreting results generated by an outfit that you hired. Natixis uses Core Data to do their survey legwork. Here is a Link that describes the Core Data organization and some of their talent:
Core Data seems to have the capabilities to do worldwide surveys. It doesn't disturb me one whit that Natixis does its own interpretation of the data collected.
I certainly agree with you that the summary conclusions you listed are mundane if they were the only conclusions or stats presented. But they were not. Just about each page of the white paper provided some detailed statistics associated with both advisors and their clients.
I also agree that the referenced white paper was designed for financial advisors, and not for private investors. That does not diminish the value of the surveys. These surveys still identify shortfalls in both advisor and individual investor thinking and planning.
This takes us back to the Jaffe article that prompted this hot exchange: investors "are Probably Way Too Optimistic About Your Investment Returns". Most of the postings don't argue this assertion. In any final analyses, that's what it is all about. A casual charge that Jaffe and Natixis are BSers is far too extreme. Certainly any analysis or article has shortfalls. Exceptions simply do not exist.
Sorry for the delay in my response. My wife and I are celebrating her 77th birthday. It's been a grand day.
2. In reading my comments of May 2014 I can't see where anything in them contradicts what I've written here. The issue I addressed back than appears to have been an entirely different one.
3. As you note, I've commented more than once. My initial reaction was based on reading Jaffe's article which Ted linked. From that it appeared a study by Natixis had been conducted for the benefit of (and and directed towards) retail investors. I reacted to Jaffe's assertions from the standpoint of an individual investor. Later, after looking at the document you linked (which Jaffe cites) I addressed the document itself trying to better understand its origin, purpose, methodology and why some had found it troubling. I'm afraid Mr. Jaffe did not do a very good job relating some pertinent details to his readers.
Heated? Not me. If anyone else has been heated, I'm confident you'll deal with them in an appropriate manner. I strongly agree that birthdays beginning with 7 or higher need to be vigorously celebrated.
From the looks of it, Jaffe was just reading a line off the Natixis PR, which is a summary of what Hank observed was not a rigorous study.
Hank also caught onto the fact that both the survey Jaffe was referencing and the earlier survey that MJG linked to had polled advisors, not investors. However, upon reading the PR, one discovers that the investor expectations figure reported (8.5% above inflation) did not even come from that recent advisor survey data but from an older data set. So Jaffe was sloppy in his reading or his reporting in saying that a recent study reported this. (The info was in the PR for the survey, but not from the survey itself.)
Comments
Not only are investors far too optimistic of the level of near term return likelihoods, but their financial advisors are too optimistic also. It is not likely that the average portfolio will deliver the 5.9% returns over inflation that the professional advisors are currently projecting.
Given our low GDP growth rate of about 1%, the odds are against the good times that our advisor class is forecasting. The current GDP and irs coupled productivity growth rates are more than two times below our historical average. The other contributor to annual returns, the market's P/E ratio level, is far above its historical average, so the most probable direction for that contributor is downward, a regression-to-it's-mean movement which will subtract from returns.
Both these returns factors suggest muted near term equity returns, not necessarily negative, but perhaps a factor of two below the historical returns. This forecasting method, which has long been advocated by John Bogle, is not highly accurate for any given year, but it does a very respectable forecasting job over a timeframe like a decade.
According to that returns equation, expect muted equity returns, even below those endorsed by the reported financial advisor wizards. Retirement dates might need to be delayed for those assuming near historical equity market returns. That's not a high probability future. Sorry about that, but that's the way the cards are likely (never a guaranteed outcome) to play out in the next decade.
Best Wishes.
Who exactly are these "advisors" who expect inflation +"5.9%"? I just love pseudo-exact numbers like that in a context like this one. Not roughly 5.5%, not roughly 6%, but exactly 5.9%. Sorry MJG- just more BS.
Every responsible advisor that I've noticed in the last couple of years is using 4%, and that with some caution.
We seem to be in complete agreement that both investors and their financial advisors are likely overly optimistic with respect to portfolio returns in the next decade. According to the surveys, financial advisors attempt to dampen the enthusiasm of their clients. That's probably a good policy. Realism is always superior to wishful optimism.
We part ways when assessing the worthiness of the Jaffe article that was referenced. It is not BS. To summarily discredit the article as BS does a disservice to Chuck Jaffe, to the company who conducted the surveys, and to the MFO membership.
Jaffe has been a respected and widely recognized financial writer for decades. He would never risk compromising his reputation by inventing statistics or referencing a faulty survey. He did not do so in the current article.
Jaffe relied on statistical data collected by an outfit (Natixis) that frequently does worldwide financial surveys. Typically their surveys question over 7000 individual investors and/or over 2000 financial advisors. These surveys are conducted in double digit countries.
You might not trust surveys. That is your choice. But the surveys seem to be very well designed and honestly conducted.. Before assigning the BS perjorative to Jaffe and the Natixis Global Asset Management firm, I suggest you visit the two Links that are now provided:
http://www.aaii.com/authors/chuck-jaffe
http://durableportfolios.com/docs/593/246/Global Financial Advisor Survey Whitepaper_2015 archived_final.pdf
Perhaps these documents might soften your strong opinion. I hope so. Neither Jaffe nor Natixis deserve your BS judgment. You may not believe the survey results, but they are the results.
Best Wishes.
Geez: What study was that? I missed it. None of my fund houses ever asks me that question. I wouldn't answer them if they did. The way I see it, it's their job to run the fund to the best of their ability according to the mandate given them in the Prospectus. I'll live with the results.
A word on Natixis. They are a French investment company and owner of several global fund groups, including U.S. based Harris Associates which operates the Oakmark Funds. I suspect (but can't confirm) that their study covered investors in many different global markets - some with much faster growing economies and a correspondingly less experienced retail investor class than the U.S.
---
"Pat Dwyer of Merrill Lynch says the firm thinks we are still in the early stages of a secular bull market. Healthcare stocks will do particularly well, he predicts."
This is from the same article, but seems to contradict the author's broader argument.
---
"Investors are optimistic about returns; they have high hopes for what they can achieve,” said David Goodsell, executive director of the Durable Portfolio Construction Research Center at Natixis Global Asset Management."
Hope is not a plan. (I guess this supports what the author is trying to establish.)
---
"This level of expectation is a recipe for disappointment, even if the market winds up with gains. It’s a reason to be dissatisfied with an adviser, even if he or she delivers the 6% return that person thinks is realistic."
Seems to me this type of thinking puts the cart before the horse. I'm inclined to decide first on a prudent allocation to various assets, based on age, time frame, risk tolerance and the purpose for which the money is invested. Once so allocated, I'll take whatever return the market provides. Nobody can predict markets. However, if folks are expecting 5-6% above inflation year after year - I'd say they'd need to be pretty far out on the risk spectrum to achieve that consistently. Not impossible to achieve - but not an easy goal either.
MJG, I just know you are gonna say you read the durableportfolios link you provided, but ... did you read it?
The Jaffe link is a photo and bio fluff and whatnot, no merit to be inferred from it particularly, and his MW article is indeed at the level of his sometime bullshit (other of his work has substance, sure).
Was he referring to some other 'study'?
The pdf at the link you provided is even worse bullshit because full of rah-rah for advisers and tips and hints and other investor-meaningless text. Try doing a search for 8.5 or 5.9 within it. Maybe you meant to point to some Natixis study? Or some other study? If not, and you read it, suggest rereading.
I'd say OJ put it exactly.
Your post has more than a small touch of bitterness. It also has the feel of desperation; the feel of a violent Kamikaze attack. That's too bad since better investment outcomes are more likely if learning and decisions are made in an unemotional way.
Yes, indeed I did read the two references that I posted. You often challenge me in that dimension, which is yet another measure of your bitterness directed at me. I assure you I am not hostile to anyone on MFO. I mostly post for educational purposes.
It was for educational purposes that I posted the two Links that you criticize. I especially referenced the Natixis PDF because it was a nice review of their baseline survey methodology. It was not the survey paper that Jaffe referenced. I extracted the rough number of investors and financial advisors generally surveyed from that review document. One objective of the Natixis work is to help advisors provide more useful service to their customer base.
You certainly should express your opinion on any topic posted on MFO. Your standards are not the same as mine. I'm sure each MFOer has his own set of standards. Hooray for those differences and the freedom to express them, hopefully in a friendly and constructive manner.
Recall what Marcus Aurelius said: "Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth." That quote is particularly insightful when discussing investment matters.
Best Wishes.
I don't mind being foolishly condescended to by any elder, I am plenty ignorant, I welcome instruction, but you lack substance waaaay too often.
Aurelius's quote is crap, and was even back when, but we all know you like to tone it up at the end of your piety. Instead, see if you can circle back to how the CJ article was not bullshit, okay? Then maybe you can try and waggle your finger at me and others yet again. Bitter, desperate, violent, please, lolz. You sure do not like being called out, do you?
Sometime practice appropriately saying 'Oops, my bad, you guys are right, it was indeed thin gruel and small beer.' I won't judge and characterize your presbyter views, promise.
Nick de Peyster
http://undervaluedstocks.info
Natixis did not conduct the underlying research, nor does the linked publication include the raw research findings. What you are seeing is a glitzy, possibly slanted, promotional piece designed to enhance Natixis's business and assist its network of commission-based advisors. It's therefore hard to evaluate, since it isn't directed at retail investors, but, rather, to the advisors who offer, promote or sell Natixis funds. https://ngam.natixis.com/us/by-price-and-performance
Jaffe appears to be in error in calling his source a "study" - as most would understand that term. Nor, I'll argue, should his source be termed a "survey", since Natixis did not conduct the survey. More appropriately, what one gets here is Natixis's interpretation of a survey conducted by someone else.
For purely illustrative purposes, here's some phrases contained in the the Natixis publication which do not comport with how a scientific study should/would have been written:
"... a perfect storm"
"... where the rubber meets the road"
"... plenty of fodder to fuel a heated debate"
I wouldn't drive across a bridge for which the engineering study of structural integrity contained such vernacular/vague terminology.
Natixis's "conclusions" are listed at the end of the publication. They might best be viewed as both guidance and suggested talking points for financial advisors.
--- Put risk first.
--- Maximize diversification.
--- Use alternatives.
--- Make smarter use of traditional investments.
--- Be consistent.
(I suspect MJG, and many others here, here would agree with some, but not all, of the above recommendations.)
Very well done. The clean and crisp air in your area has your brain cells in top form.
I started a draft of some thoughts; but you covered the needed turf regarding the article.
Appears to be marketing to me, too; and very much lacking on in depth facts to support the "marketing".
Have to get in gear outside before the freeze and snows start.
Take care,
Catch
Signed,
S. Disturber
Could be either or both, depending upon how well the advisors surveyed actually performed for their customer base; as the Natixis whitepaper is apparently directed at a captive crowd of company connected advisors.
I did read that "alternative investments" seem to be on the "next or current" hot plate of places for money to travel; if the client is in the $1-4 million dollar portfolio arena.
If and when an investment advisor can provide a true document to me of how they performed for portfolio type "x", over the past 10, 5 and 1year time frames, that would have been or is suitable for me today, I'll listen.
The most simple baseline would be to compare against the inexpensive VWINX.
Below in bold, from the 2015 whitepaper linked prior:
Investment Pragmatist: More than three-quarters of advisors believe that a
traditional stock and bond portfolio is no longer enough to effectively manage
risk and pursue returns. Fortunately, continual innovation has provided access
to new asset classes, new pricing structure and new portfolio tools, allowing
advisors to make practical decisions about which tool will best fit client goals
and investment objectives.
I wish these folks (advisors and clients) well with the alternative path.
The below fund link at about 40/60, equity/bond over the long term. Pick your own equity/bond mix, a built your own, eh? My own caution note for such a mix is that some bond types may blow up at any time, and I would always advise to be observant. 'Course, folks here are always paying attention, yes? And don't forget that the death of the 30+ year bond market bull continues to be issued by someone, somewhere; one would suspect. I recall its imminent death announcement here several years ago (the thread exists somewhere, eh?), but I don't have time for search; although I recall Mr. Snowball was involved in the discussion).
VWINX performance
VWINX composition
Lastly, I have had several pre-Halloween treats today; in order to sample the quality of what we will distribute to the young ones. Hopefully, this has not affected, greatly, my ability to think or write. 'Course, in reading this before posting; I sound a bit arrogant, eh?
Well, I know I am as smart and do as well as some financial advisors on this planet.
Sincerely and respectfully,
Mr. Catch
I certainly do agree with much of what has been posted on this exchange, especially your last posting. On this topic, with the same prime time players (Jaffe, Natixis), this is the second time around the horn for you. I'll provide a Link a little later.
Just like no financial advisor is created equal, no financial writers are created equal either. And separate columns composed by each writer are not equal. Brilliance is hard to maintain on any timescale.
This Jaffe column might not belong on the brilliant side of the scoring, but it is not a dud either. Jaffe has been using the Natixis work for a long time. For example, you commented on a similar column about two years ago. Here is the internal Link to the column and your comments:
http://www.mutualfundobserver.com/discuss/discussion/13442/chuck-jaffe-proof-most-investors-are-clueless-david-giunta-pres-natixis-global-asset-management
It is not surprising that Natixis uses a hired firm to conduct their surveys. That's a common practice. We do the same when we hire mutual fund managers to fill our portfolios with companies of their choosing. Nothing unusual about interpreting results generated by an outfit that you hired. Natixis uses Core Data to do their survey legwork. Here is a Link that describes the Core Data organization and some of their talent:
http://www.coredataresearch.com/about/our-approach/
Core Data seems to have the capabilities to do worldwide surveys. It doesn't disturb me one whit that Natixis does its own interpretation of the data collected.
I certainly agree with you that the summary conclusions you listed are mundane if they were the only conclusions or stats presented. But they were not. Just about each page of the white paper provided some detailed statistics associated with both advisors and their clients.
I also agree that the referenced white paper was designed for financial advisors, and not for private investors. That does not diminish the value of the surveys. These surveys still identify shortfalls in both advisor and individual investor thinking and planning.
This takes us back to the Jaffe article that prompted this hot exchange: investors "are Probably Way Too Optimistic About Your Investment Returns". Most of the postings don't argue this assertion. In any final analyses, that's what it is all about. A casual charge that Jaffe and Natixis are BSers is far too extreme. Certainly any analysis or article has shortfalls. Exceptions simply do not exist.
Sorry for the delay in my response. My wife and I are celebrating her 77th birthday. It's been a grand day.
Best Wishes.
1. Here is the Natixis link from Ted's May 2014 post to which you refer. https://ngam.natixis.com/docs/352/754/562014_FINAL_Individual Investor Survey Full Report _4292014.pdf Unfortunately, it no longer functions. If you can provide a working link to the document on which I commented in that 2014 thread I'll be happy to take another look at it.
2. In reading my comments of May 2014 I can't see where anything in them contradicts what I've written here. The issue I addressed back than appears to have been an entirely different one.
3. As you note, I've commented more than once. My initial reaction was based on reading Jaffe's article which Ted linked. From that it appeared a study by Natixis had been conducted for the benefit of (and and directed towards) retail investors. I reacted to Jaffe's assertions from the standpoint of an individual investor. Later, after looking at the document you linked (which Jaffe cites) I addressed the document itself trying to better understand its origin, purpose, methodology and why some had found it troubling. I'm afraid Mr. Jaffe did not do a very good job relating some pertinent details to his readers.
Heated? Not me. If anyone else has been heated, I'm confident you'll deal with them in an appropriate manner.
I strongly agree that birthdays beginning with 7 or higher need to be vigorously celebrated.
Regards
Hank also caught onto the fact that both the survey Jaffe was referencing and the earlier survey that MJG linked to had polled advisors, not investors. However, upon reading the PR, one discovers that the investor expectations figure reported (8.5% above inflation) did not even come from that recent advisor survey data but from an older data set. So Jaffe was sloppy in his reading or his reporting in saying that a recent study reported this. (The info was in the PR for the survey, but not from the survey itself.)
Here are the PR pages for the current reports :
Natixis 2016 Individual Investor Survey (data collected Feb/Mar 2016, report May 24, 2016. full paper here)
Natixis 2016 Financial Advisor Survey (US data collected July 2016; PR dated September 28, 2016.)