Wisdom from investing mistakes made by money managers

‘I had to remortgage the house’: Wisdom from investing mistakes made by money managers

For money managers, the job involves making thousands of decisions a day. And some of those choices are inevitably going to be the wrong call.

With inflation and stock market volatility continuing to be hot-button issues, the pressure is on for everyday investors and their money managers to keep finances and portfolios, at the very least, afloat.

“The reality is, to be a good professional, you have to make lots of mistakes, because you make lots of decisions,” says Mark Yamada, president and CEO of PUR Investing in Toronto, Canada.

The trouble, he adds, is that it’s hard for financial advisers to admit their mistakes — partly because no one wants to hear of their money manager doing anything but growing their investments.

“Think of any other profession, a lawyer or, or even a doctor … ‘Yeah, we made a little bit of a goof.’ You could never admit that,” says Yamada.

But mistakes still happen. And for the average investor, there are plenty of lessons to be mined from the goofs of professionals.

There’s no “bulletproof formula”

Claudio Chisani, principal of Chisani Wealth and portfolio manager at BlueShore Financial in Vancouver, says it’s important to note there’s a huge difference between mistakes and misconduct.

“You have to differentiate between the mistakes that are critical, when you really lost people’s money and people went to jail for doing illegal things,” says Chisani. “Those are not mistakes. Those are value-driven things.”

Chisani is happy to admit the mistakes he’s made over his career have often been learning opportunities for him — in fact, he says he is where he is today because he was able to learn from what worked well and what didn’t.

As for his biggest mistake? Chisani says in his early days, he wasted so much time overanalyzing every move.

“You’re looking for the bulletproof formula that’s going to get your clients the most positive outcome,” he…

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