Let me save you some time...

August 2016

Citywire Wealth Manager Retreat

mostly bots and

day-drinkers

The Books!
Backstage Wall
Street

Clash of the
Financial Pundits

McGraw-Hill, 2012

McGraw-Hill,
2014

An inside look at the

brokerage industry
and how investors
are sold products
and services.

An inside look at
the financial
media and the
experts whose
opinions its built
around.

Handsome

Referee

???

Needs to use
the men's room

Hungover

Sleeping

Angry

NYSE Mascot
5
6

Also sleeping

Possibly British

My Firm
Ritholtz Wealth Management

Established New York City, Sept 2013

Registered Investment Advisor (RIA)

$425 million AUM, 14 employees

4 CFPs, 2 CFAs on staff

Blogs @ RWM

Ben Carlson - A Wealth of

Common Sense

Michael Batnick - The Irrelevant

Investor

Barry Ritholtz - The Big Picture

Josh Brown - The Reformed

Broker

Tony Isola - A Teachable Moment

Bullet points

The 6th Fastest Growing

RIA in America

A Great Time to be an Advisor

The US Advisor Industry at a Glance

301,126 financial advisors in the industry, across all channels (down

from 338,909 in 2005)

10.6 million managed accounts, up 65% since 2009

Wirehouse advisors have largest AUM per advisor, but overall

market share slipped below 50%.

Fee-based advisors by custodian:

Schwab: 7000, TD: 4700, Fidelity: 3300

Over 10,000 firms offering independent advice

Source: Tiburon Research

11

Client Fit is Everything

The wrong investment clients

are looking for strategies that work well in all market

environments (spoiler alert: no such thing)

are more concerned with alpha and sharpe ratios than they
are about reaching tangible life and spending goals

fixate on daily and weekly market movements

obsess over what they perceive to be the superior returns

of others

Are more concerned over whats working now instead of

what works typically, over time

Our Beliefs

Risk is the most misunderstood word in all of finance.

Asset management without goals is like construction without blueprints.

How can we know what the right investment portfolio is for a person if we dont know what theyre
investing for, how much theyll need to accumulate and when theyll use the money?

Less is more, taxes and costs matter, forecasts are not reliable, performance is mean-reverting.

In a perfect world, everyone can sit back and let asset prices do their thing. Its probably not a perfect
world.

How can we incorporate academic evidence with real-life experience?

Strategic Asset Allocation

Strategic asset allocation will succeed in generating the necessary returns
with relatively high efficiency and low maintenance, but....

It will look stupid or careless from time to time

It will be gut-wrenching during extreme market scenarios

It will test the limits of investors patience and mental fortitude

If it is given up on at the wrong time, it will be indistinguishable from a failed, losing

strategy

Marrying Tactical with Strategic

By adding tactical alongside strategic asset allocation, we prevent the worst
aspects of strategic from destroying the whole portfolio...

Investors require a release valve during periods of market stress

Having a rules-based tactical solution in place eliminates the risk of making poor decisions in
the heat of the moment

Most tactical approaches are seeking to beat the market, ours is seeking to encourage good
behavior

The Fama / Shiller Paradox

Tactical: Stuff We Threw Out

Analyst Recommendations
Wall Street Strategists Targets
Mutual Fund Inflows / Outflows
Polling and Sentiment Surveys
Discounted Cash Flow Analysis
Relative Strength (RSI)
Stochastics
Venture Capital Valuations
Advance/Decline Line
Correlations
Dispersion
The Lightning Round
Initial Jobless Claims
Labor Force Participation Rate
The Vix
Crude-Oil-to-Gold Ratio

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The Beige Book

Industrial Production
ISM Manufacturing
Fed Minutes
Global PMIs
Monthly Auto Sales
Credit Ratings
LIBOR
Golden / Death Crosses
GDP Forecasts
Earnings Estimates
PE Ratios
CAPE Ratios
Discounted Cash Flow
13F Filings
On Balance Volume

McClellan Oscillator
The ARMS Index
Magazine Covers
Hi-Lo Index
Inflation Expectations
IPO Bubbles
Fibonacci Levels
Pattern Recognition
Yield Curve
Consumer Confidence
Case-Shiller Home Prices
US Unemployment
Futures Markets
ADP Private Payrolls
Presidential Cycle
Seasonal Cycle

Energy prices
Currencies
Buyback Totals
Commitment of Traders Report
Market Cap-to-GNP Ratio
Barrons Roundtable
Margin Debt Totals
FOMC Meetings
ECB / Bank of England Meetings
New Home Starts
High Yield Spreads
Insider Selling / Buying
The Hemline Indicator
Sector Rotations
M&A Bubbles
MACD

Worth Considering

Long-term investing is nice to talk about,

but life is not lived in the long-term

The recent popularity of indexing and

passive investing is producing short-term
calm, will lead to explosive volatility
eventually.

Asset allocation is all an investor needs, so

long as that investor is in a coma or on a
desert island without wifi.

The wrong question is Whats the best

investing strategy?

The right question is What is the best investing

strategy for me?

Finding what works for you is Step One. Steps

Two through Infinity are accepting the
drawbacks of your chosen strategy.

Q&A (Im all ears)