Is anyone else getting tired of hearing about the ‘new normal’ in the financial pages?
It’s like that time I got Meatloaf’s ‘Bat out of hell’ stuck in the tape player of my crappy old celica. Round and round it went, rolling out the same old lines.
In the end it got me into shape. I used to ride my bike just so I wouldn’t have to listen to it.
But you can’t get away from the ‘new normal’.
The new normal seems to be that that every week we’ve got to listen to some fund-manager, financial advisor or politician blame some colossal f@$# up on “the new normal”.
Give me a break.
Who came up with the term? Fund managers. It was reportedly coined by celebrity fund-manager Bill Gross from Pimco.
And what does it mean?
The gist of it is that over the past 20 years the investment community had a string of good factors at their back. This helped generate some tidy returns. But these factors have now all unwound. The future is going to be a lot less easy.
And this world of lower growth and lower returns is just the ‘new normal’ we have to get used to.
Winter is coming.
And where was ol Blinky Bill going with that one? Apparently he was trying to ‘manage expectations’. Trying to make sure his clients did place any unfair expectations on him. That they wouldn’t go and ask anything unreasonable – like asking their fund manager to actually make money for them.
“Managing expectations”. There’s a cute term. Like the way a mugger is helping you manage your liquidity.
I wonder how many people bought it.
“Why aren’t you making us any money? We’re paying you an arm and a leg in fees.”
“That’s the new normal. You can’t expect fund managers to make money for you. That’s unreasonable.”
“Oh, I see. Well, carry on them. Keep up the good work.”
“Thanks. That will be $200.”
Fund managers have got some cheek haven’t they? They take a bite out of your funds every chance they get. Management fees, withdrawal fees…
The one I really love is ‘out-performance fees’. That is, if they do better than the market, which is to say, better than a monkey with a mouse and access to index fund, then they charge you a fee for “performance”.
Of course, if they under-perform the market they give you your money back.
No, of course they don’t. If they get outgunned by a masturbating monkey, then you’ve just got to wear it.
Just like how they’re asking you to wear ‘the new normal’ now.
“It’s a tougher environment now. It’s not as easy to make money,” they whinge.
That’s why poor ol’ mums and dads are paying you the big bucks – the ‘management’ fees. So you can “manage” their money. Use your supposed knowledge and expertise to help them make money in difficult times. That’s the service you’re supposedly selling, remember?
And if it was easy before, why the f@%# were you charging us fees? You were happy to take our money then. I didn’t hear about any fund managers offering discounts because conditions were ‘easy’.
“I’m pleased to inform you that I’m sending you a refund this quarter because market conditions were so favourable, that mostly all I did was play golf, do lunches, and masturbate like a monkey.”
If there is any truth to this ‘new normal’ garbage is that the old ways of managing people’s money aren’t working. They haven’t been for years.
And this is a challenge to the fund management industry. They need to get creative. Do some research. Think outside their Porsche boxsters.
Just like you and I have to do, everyday.
And it can be done. I’ve done pretty well over the past 5 years. Very well in fact. And I had to work hard for it. But the one thing I didn’t do was throw up my hands and say, oh well, this is the new normal. There’s no money to be made.
Pull your heads out of your asset allocating software and do some work, you lot!
But what really bugs me is how many people are jumping on the ‘new normal’ excuse band wagon.
After the fund managers came financial planners. That useless mob of dils were more than too happy to have an excuse to not do any work.
So the next time some 19 year old kid with a Cert IV in Losing other people’s money from Toowoomba TAFE tells you that it’s a difficult time to get real returns, throw a bucket of water over him. Time to wake up champ. People are trusting you with their money. Rattle those lazy bones and do the work you’re supposed to.
Just because you’re not tripping over great returns, doesn’t mean they’re not out there.
(Maybe get him to sign up to this blog if he’s short of good ideas.)
And the thing to watch out for now I reckon is the politicians. Oh they love a good excuse. Especially if lazy fund managers and financial planners have gone and primed the public for them.
Growth is lower – that’s the new normal.
Unemployment’s rising – new normal again.
Inflation, budget deficits, worsening trade balance – yep, yep, yep. All the new normal I’m afraid. You can’t expect us to manage these things.
Actually we can. That’s what you’re supposed to do. Less lunches, more time trying to figure out some solutions.
Enough passing the buck.
And so with fund mangers, financial planners and politicians all ducking responsibility, who can you trust?
Yourself. You’ve got to trust yourself. Take responsibility.
And you might think you don’t have the skills, but I can tell you don’t have to try hard to outperform that lazy mob of bastards.
And I reckon I can come up with a few tricks and strategies for you. Just stay tuned.
Just don’t believe them when they tell you there’s no money to be made. There is.