[Wall Street Does Not Have the Answers]
Gordon Murray died January 15, 2011. He was 60 years old. Brain cancer. Inoperable.
You may never have heard of Gordon Murray. He was a former bond salesman with Goldman Sachs and rose to managing director at Lehman Brothers and Credit Suisse First Boston. He retired from Wall Street in 2001.
In 2008 he was diagnosed with brain cancer. In June of 2010 new tumors were discovered and Murray was given 6 months to live. On June 6th, he called his financial advisor, Dan Goldie and told him of the turn of events. Goldie suggested that Murray write the book he had been talking about for years. Goldie confesses that he may have been a little brusque based on the news Murray had just revealed. But write the book they did.
Now you would think that after 25 years on Wall Street, the book would focus on hedge funds, derivatives and the like. If that is what you are looking for, don’t bother buying, ”The Investment Answer”.
According to a January 20, 2011 article by Dennis Hevesi in the New York Times “The book offers a blueprint for how to do better and worry less by taking a simpler more regimented approach” to investing. Poor phrasing, but good advice.
Murray is quoted as saying “It’s American to think that if you’re smart or work hard then you can beat the markets”. Murray discovered that is not true and I agree whole heartedly.
In the New Times article, it said that Murray turned to Dimensional Fund Advisors when he retired in 2001 to handle his personal portfolio. DFA is a firm that rails against Wall Street’s aggressive investment philosophy. At Dimensional, he began taking advice from Dan Goldie.
Murray is quoted in the Times article stating “I learned more through Dan and Dimensional in a year than I did in 25 years on Wall Street”.
So what advise does the “The Investment Answer” suggest? In a recent interview on National Public Radio, Dan Goldie told Robert Siegel that there are 5 decisions that an investor need make.
First, do you invest on your own or do you hire help. If you hire help, who do you hire?
Second, in what will you invest i.e. stocks, bonds, cash?
Third, how will you divvy up the money among stocks, bonds and cash?
Fourth, will you invest actively or passively?
And finally, do you rebalance and if so how?
I agree that making these 5 decisions is a good start. The answers to them will raise more questions requiring more answers. For example, how you answer the second and third questions will determine the risk in the portfolio. That will lead to a discussion on true diversification.
In discussions with my clients we talk about the “20 Must Answer Questions” that true investors need answered to be a truly knowledgeable investor. And being a truly knowledgeable investor can lead to peace of mind investing.
Bill Mullen CFP, MBA
Investor Coach
4315 Hidden Cove Rd
Park City UT 84098
435-655-0508
435-655-0759 Fax
801-916-7283 Cell
bmullen@catapulsion.net
www.billmullen.org
Investment Advisory Services offered through Mullennium Finance LLC a Utah Licensed Investment Advisor
