THE COLUMN I WROTE for The Wall Street Journal for more than 13 years was popular with readers—which was just as well, because it wasn’t always popular with Journal editors.
As best I could tell, top management appreciated the column, as did most of the editors I reported to directly. But others were critical. One editor, during his annual review of my performance, even demanded that I change my approach to writing the column. I threw a world-class hissy fit, the deputy managing editor intervened and I was able to carry on as before.
Still, the criticisms I received during that employee review, as well as those I heard over the years from other editors, say a lot about how the financial media operates—and why it often does a disservice to everyday investors. So, what were the criticisms I received? They were threefold:
You’re repetitive. Week after week, I’d hammer on themes like the superior long-run return from stock investing, the importance of diversification and holding down investment costs, and the futility of trying to beat the market. Was I repetitive? Absolutely.
But there’s value in repetition. Amid the financial markets’ daily turmoil, investors often lose sight of fundamental truths and make foolish changes to their portfolio. To stay the course, many folks need to be regularly reminded of what sensible investing looks like.
Equally important, the alternative to repetition—espousing a new investment strategy with every new column—would almost certainly hurt readers’ portfolio performance. Some writers, of course, do indeed devote every article to a new stock, mutual fund or market outlook. That certainly gives them plenty to write about. But I’m not sure it does much for readers, beyond getting them to fret unnecessarily over their investment mix and probably trade far too much.
Your advice is unsophisticated. Journal readers often have high incomes and fat portfolios. Some editors believed that meant these readers should be pursuing “sophisticated” investment strategies, and that I should be writing about such nonsense in my columns.
“Sophistication,” of course, is a Wall Street ruse to extract hefty fees from ill-informed investors. How many investors have ended up regretting the money they sunk into hedge funds, real estate partnerships, managed futures, private equity, family trusts and goodness knows what else?
I believe the low-cost index funds I own are an appropriate choice, whether the value of someone’s portfolio runs to four figures or eight. I can’t recall ever hearing an investor regret buying broad market index funds—but I’ve heard plenty of regrets about purchasing purportedly sophisticated investments.
Your columns aren’t newsy. If you kick around for long enough, the latest hot thing seems suspiciously like some earlier hot thing. Who couldn’t observe 2021’s housing frenzy and not think of 2005 and early 2006? Who couldn’t watch the rise and fall of Cathie Wood’s ARK Innovation ETF and not recall the late 1990s and managers such as Ryan Jacob and Garrett Van Wagoner?
The financial media focuses on the markets and its key players because there’s constant change—and that makes for easy news. Is the Dow Jones Industrial Average up or down? For the financial media, it doesn’t much matter. What does matter is the market is open five days a week, delivering a ready-made topic that helps fill that day’s news hole.
But the truth is, each day’s news offers little of value to longer-term investors. Instead, for those striving to be prudent managers of their own money, the big wins are to be found in subjects that rarely rank as news, things like when to claim Social Security, what insurance you need and don’t need, estate planning, trimming taxes, saving for college and funding retirement accounts.
When I’d write about such topics, editors would want to know what the news hook was. I’d tried to cook something up. But I’m proud to admit that I often failed.