March 2019 | Posted By John Reagan

Free image from www.gapminder.org

 

Financial writer and friend Wendy Cook posted the following piece on her own blog recently, and granted us permission to share it here.

We like Wendy’s post and applaud the ideas of the late Hans Rosling because his work parallels our own emphasis on evidence-based investing. His bestselling book Factfulness points out that our instincts and biases often make it difficult to perceive the world factually. Just as we point out in our work with you, and as we’ve highlighted in past reviews of Michael Lewis’ book Moneyballit’s tricky work to get out of our own heads and better understand the world through data and evidence minus emotion and instinct.

*Keep in mind Wendy writes for a special group of advisors.


 

Facts, Finance, and Feeling Good About Yourself

by Wendy J. Cook

Recently, I finished reading Factfulness by Hans Rosling. I discovered Rosling’s work nearly a decade ago when his YouTube video “200 Countries, 200 Years, 4 Minutes” went viral, at least among us data-dorks.

Finding Factfulness

Making the leap from Rosling’s four-minute video to his full-length book took some time. Unfortunately, it was time Rosling himself did not have, having passed away from pancreatic cancer in February 2017. Reminiscent of the late Gordon Murray’s inspiring collaboration with Dan Goldie on The Investment Answer, Rosling dedicated the last year of his life to completing Factfulness. He collaborated on it with his son and daughter-in-law, who published it in 2018.

Referring to “data as therapy” and “understanding as a source of mental peace,” Rosling urges us to employ “factfulness” to recognize that the world is usually better off than we think. With Bill Gates describing it as “one of the most educational books I’ve ever read,” I figured it was worth checking out.

Factfulness and Finance

How does factfulness work? Without it, we become overwhelmed by all the bad news going on around us. With it, the greater facts remind us that historical conditions have been even worse. In other words, we are making enormous progress, but close up, we can’t see it. Rosling explains:

“Journalists who reported flights that didn’t crash or crops that didn’t fail would quickly lose their jobs. Stories about gradual improvements rarely make the front page even when they occur on a dramatic scale and impact millions of people. … Safe flights are not newsworthy.”

It’s easy to connect these messages with the same ones you likely espouse for yourself and your clients as you help them embrace evidence-based investing.

A Higher Purpose

Beyond that, I took a greater message from the book. If your advice has been incorporating insights gained from behavioral psychology, it’s one you’re already familiar with, but it bears repeating: By losing sight of factfulness, it may often feel as if BIG acts, ENORMOUS effort and MAJOR improvements – the kinds we read about in the paper – are the only changes that matter.

All facts considered, this could not be further from the truth. Ordinary, everyday accomplishments are what Rosling describes as “the secret silent miracle of human progress.” Your and my small, unsung deeds are the streams that feed rivers that run to oceans of accomplishment.

So, whether it’s going that extra mile for your clients or dedicating some time to a community project, let’s each take on one or two good deeds – today, tomorrow, and the day after that. They don’t have to be huge; just make them a habit and, over time, that will do.

Give the Gift of an Amazon Review

Here’s one small possibility you may not have thought of: Give a good financial book a positive Amazon review.  

You see, some of my best friends are financial authors. So, I happen to know, one of the best ways you can help them increase their sales and readership is to review their books on Amazon. These days, a strong presence there is electronic gold, like being in the “featured books” section of a brick & mortar store.

Your review need not be novel-length itself. Two minutes, five stars, and a few sentences should do it. Go ahead. Pick some of your recent favorite financial reads, and go to it.

March 2019 | Posted By Buddy Reisinger

Where would we be without alphabetic order in our life? Imagine if airports listed all departures randomly on their flight boards? We might never make it to the gate.

But should you find your investments alphabetically? When you’re presented with a list of available funds, should you prefer the ones that appear toward the top of the list?

This is not a trick question. Of course, the answer is no. It shouldn’t matter one bit where a fund name falls on an alphabetic list. And yet, amazingly, a recent study found that many investors may be unintentionally allowing “alphabeticity bias” to creep into their decisions anyway.

The study, “Alphabeticity Bias in 401(k) Investing,” is slated to be published in a forthcoming issue of The Financial Review. Investment selections in 401(k) retirement plans are often presented in alphabetic order, so the study’s authors took a look at whether plan participants were allowing that order to influence their choices. They found that, indeed, “alphabeticity – the order that fund names appear when listed in alphabetical order – significantly biases participants’ investment allocation decisions.” The longer the list of selections, the more alphabeticity bias appeared.

Why would we do this? The authors proposed the reason is related to another bias they called “satisficing.” When you’re reviewing an alphabetic list of choices, once you’ve found one that suits your purpose, you tend to give less consideration to the rest of the list. “My work here is done,” your brain tells you, and it shuts down … even if there may be an even better selection further on.

You shouldn’t, and we won’t, settle for next-best investments – in your retirement plan or anywhere else. Helping you avoid doing so is one way we encourage you to Take the Long View® when you invest.

March 2019 | Posted By Rick Hill

Not everyone talks about inflation, but they should. Why? Inflation is the quiet monster taking away our purchasing power. Over time, inflation slowly happens, effectively reducing the power of the pennies in your piggy bank.

We can’t prevent inflation, but we can – and should – dull its appetite. How do you do that? Evidence-based investing is our recommendation.

While volatility in the markets can flame our fears, taming inflation is the bigger challenge. This is why we invest to begin with. To keep the inflation monster from feasting on your assets, invest in market factors, and stay invested in them over the long-haul. We know you understand this fundamental concept, but now you have a cartoon as a reminder.

March 2019 | Posted By Matt Hall

Here at Hill Investment Group, we’ve intentionally set up our infrastructure to offer seamless client care from Houston, St. Louis, or anywhere else we may roam. As such, if we didn’t tell you, you’d probably never know that our Chief Operating Officer Nell Swanson Schiffer has relocated from Houston to St. Louis, at least for a while.

By happy coincidence, her husband was recently accepted into the Internal Medicine Residency program at Washington University in St. Louis. (Congrats, Walter!) With Nell already an integral member of our HIG team, it was even easier for the couple to pick up roots and head to St. Louis.

Never one to miss an opportunity, Nell mentioned the move when she was speaking with the St. Louis Business Journal about our related, 2019 Best Places to Work announcement. In the same issue, she shared her journey with Business Journal readers. It’s an adventure that has taken her from wearing a flame-retardant jumpsuit as a Houston-based petroleum engineer, to her role as HIG’s COO.

Click here to read all about it. 

The common denominator between Nell’s past and current careers? A passion for pursuing ingenious and disruptive best practices across all of life’s pursuits.

We welcome Nell to our St. Louis office, where we’re confident she’ll continue to be valued firm-wide.

March 2019 | Posted By Nell Schiffer

The Hill Investment Group, Summer 2018

In a recent client newsletter teaser, we were excited to leak the news that Hill Investment Group was a finalist in the St. Louis Business Journal’s 2019 Best Places to Work. Today, we are honored to announce the results. Drumroll, please! 

HIG took second place in the small, 10–49 employee category.

Out of 250 nominations and 85 finalists among all categories, we think that represents admirable odds on our results. (“Odds On” … get it?)

You can read all about it here.

As much as we’re enjoying the recognition, we’re also happy to share what we’ve learned with other business owners interested in building similar corporate cultures in their offices. Since successful employees help generate successful outcomes, we figure everyone comes out ahead.

Want to learn more? Give us a call. In the meantime, here’s one of our favorite tips from our spotlight in the St. Louis Business Journal:

“[HIG’s] leadership believes in helping identify each team member’s unique ability. When you know what you do well and get to spend the majority of your time doing it, then work doesn’t feel like work – it’s fun.”

February 2019 | Posted By Matt Hall

On a wintry February morning in St. Louis, we were honored to spend time with Dave Butler, Co-CEO of Dimensional Fund Advisors. Over breakfast, we were reminded why Dave is the type of leader we’d all work for. That’s saying something, as we’re picky about who we’d follow.

We’ve been collaborating with Dimensional since we launched Hill Investment Group, but this was the first time we heard Dave’s own story about how he discovered his life’s calling there.

Dimensional is now one of the largest mutual fund companies in the world, with 1,300+ employees, 13 global locations, and over $500 billion in global assets. But it was a fraction of its current size when Dave joined them back in 1995. At the time, he was working on the East Coast, and wanted to return to his California roots. He sent his résumé to this nascent fund manager in response to a Wall Street Journal ad he spotted, and beat out over 300 other applicants to get an interview.

Knowing very little about Dimensional, Dave told us he’d contemplated skipping the interview. Fortunately for all of us, the Santa Monica office was on his way to something else, so he showed up for the scheduled meeting after all.

Minutes into the interview, Dave was invited to have lunch with a Nobel Prize laureate who was part of the Dimensional team. His impression of the firm changed quickly that day; he could almost physically feel the team’s enthusiasm for its novel approach to “applying academic research to practical investing.” From that day on, he was hooked.

We are grateful to be surrounded by a similar level of enthusiasm in our own firm and among our key strategic alliances, like Dimensional. They and we are mindful of who we work for – our clients, that is – and how exciting it is to help them put the evidence-based odds of successful investing on their side. We’re also very glad Dave made it to his interview!

February 2019 | Posted By Katie Ackerman

Team consists of CBRE, Chouteau Building Group, and Amie Corley Interiors

As we mentioned in a prior post, Hill Investment Group (in St. Louis, not Houston) is under construction. In both cities, we have chosen suites in centrally located, older office towers. The St. Louis tower was completed in 1964, so updates require talented people who understand the quirks of an older office space. We snapped the photo above during our weekly meeting so you can see the key members of our construction and design team in action. Well, maybe not in action, as much as in deep conversation about how to ensure our redesigned space is even more welcoming and functional than before.

Our building managers were kind enough to give us a suite in the neighboring building during construction, so we can closely monitor progress until our move-in day, April 13th.

We’re excited, and literally counting down the days with a construction paper “chain,” tearing off a link for every passing day until we return to our updated Suite 350. We’ve already been there for 14 years, and look forward to at least eight more, having renewed our lease through then.

February 2019 | Posted By PJ McDaniel

Robin Powell is an award-winning journalist dedicating himself to spreading the message of evidence-based investing. He’s made films, is prolific on social media, and regularly interviews influential thought leaders.

Most recently, his blog, The Evidence-Based Investor (where our interview, linked below, appears), was included in the shortlist for the Headlinemoney Awards 2019 Financial Blog of the Year. Robin reports the site is receiving more than 1,000 visitors daily – half from here in the U.S – so it’s no wonder it’s earning well-deserved accolades.

We are fans of Robin’s work as well, and he has admitted to periodically liking some of what we put out in the universe. Enjoy this 30-minute conversation we had with Robin, or see the notes below if you’d like to skip around to topics you’re most interested in.

Show notes:

  • Is Saint Louis the Evidence-Based Investing capital of the world? [1:18]
  • What’s in Odds On, why did Matt write it, and why is it different from other investment books?  [2:50]
  • Hill Investment Group: Its history & today. [5:53]
  • Hillfolio: Is it a Robo Advisor and what does it cost? [7:18]
  • We’re rooting for our competition, because the previously ignored investor wins.  [10:54]
  • How does Hillfolio invest [12:50], and are sustainable funds an option? [14:40]
  • The importance of investor behavior: HIG & Hillfolio going beyond the spreadsheet [15:57]
  • Who do we like to work with and who can we best serve? [19:40]
  • “Big rocks” and the biggest benefit to considering them first. [20:50]
  • Why are we doing Hillfolio? It’s what is in our heart. [23:33]
  • Matt and PJ reflect on Jack Bogle’s Legacy. [25:36]