ClearShares Blog

Insights into behavioral finance, systematic investing, and financial advisor practice management from ClearShares and Blueprint Investment Partners (sub-adviser to ClearShares OCIO ETF)

Market Predictions – Why Bother?

Posted on 1/4/2023
By Jon Robinson, Portfolio Manager, ClearShares OCIO ETF

Well, here we are again.

It’s that time of year when many asset managers like to make predictions about the year ahead, while Blueprint Investment Partners, which sub-advises the ClearShares OCIO ETF, calls attention to the foolishness of that exercise. As evidence, I give you this January 2022 tweet from Bloomberg media personality Jonathan Ferro, who recaps how 14 leading financial firms foresaw how the S&P 500 would end 2022.

Their guesses lend credence to my assertion that one of the only annual market predictions worth making is this: Following a consistent, disciplined investing process will lead to better outcomes than trusting the predictions of financial “experts.”

Egg with worried face drawn on the shell

Systematizing the Referral Process for Financial Advisors

Posted on 11/28/2022
By Jon Robinson, Portfolio Manager, ClearShares OCIO ETF

Remember that episode of “Seinfeld” where Uncle Leo gets Jerry’s father a last-minute appointment with a top notch back doctor? And when Jerry’s father accuses the office of stealing his wallet, Uncle Leo is mortified since he gave a personal recommendation and asked the back specialist for such a big favor.

Although this scenario was from a sitcom, it is not far off from the view of the financial advisory world held by Mike Garrison, a business coach and best-selling author. In his just-released book, “Can I Borrow Your Car?” Mike highlights the importance of knowing and trusting both parties in a referral: who you’re referring and who you’re referring to. If you “loan” a key relationship out by making an introduction, you want absolute confidence the individual will come back to you without dings, dents, or scrapes.

‘Can I Borrow Your Car’ book by Mike Garrison

Ingredients Matter – In Baking & Investing

Vanilla is a fascinating ingredient. It is one of the most popular flavors worldwide and is incredibly common for use in baked goods. The process of creating vanilla flavoring is time-consuming and labor-intensive, which is why in its purest form it is also one of the most expensive spices in the world.

Vanilla’s widespread use and high value alone are not what makes it interesting. Take vanilla and add it to a cake mix and it enhances the flavor, turning an ordinary result into something great. But if you first bake the cake and then drizzle even the highest quality vanilla over it, you have effectively ruined the dessert.

Ingredients matter. So does the order in which they’re combined. In baking and investing.

What The Data Says About Market Crashes

Posted on 8/31/2022
By Jon Robinson, Portfolio Manager, ClearShares OCIO ETF

When we travel by air, my wife usually points out that she thinks it would be better if people by windows boarded first; that way, anyone in an aisle or middle seat wouldn’t have to keep standing up. Meanwhile, I think the Southwest Airlines style of pick-any-open-seat is optimal.

Our “gut feelings” were recently rendered irrelevant when we ran across an old episode of “MythBusters.” In it, the cast built a mock 173-seat aircraft and tested several boarding approaches using real people and luggage.

Relying on the data cut through the emotional biases. It also inspired me to take a similar data-backed look at a common question I hear about systematic investing: Is this style of investing capable of reacting fast enough to declining markets?

Streaking light from a vehicle moving fast down a hill

Investments that are Good on Paper, Bad In Practice

Posted on 7/25/2022
By Jon Robinson, Portfolio Manager, ClearShares OCIO ETF

Don’t ask me why I know this, but there’s an episode of “Sex and the City” when the women discuss dating people who “look good on paper.” They explain that a “good on paper guy” is someone who offers great credentials, good manners, and financial stability. He seems like a great match – but only on paper, because in the real world the chemistry simply isn’t right.

Isn’t it similar in investing? There are plenty of strategies that look really good on paper, but when a financial advisor implements it, the real-world application is disappointing at best and disastrous at worst.

Dissecting the 3 Stages of a Bear Market

Posted on 6/2/2022
By Jon Robinson, Portfolio Manager, ClearShares OCIO ETF

In a blog last month, I discussed how the virtually uninterrupted bull market in equities during the last 10+ years has watered down the idea of “downside protection.” This is a problem, especially since not all declines are created equal.

It has become apparent to me that a more nuanced definition of downside protection is needed, one that recognizes three distinct stages of market declines. I provided an overview of those categories in last month’s blog, and in this follow-up post I’ll round out the definitions of each stage and highlight how the systematic investing process used by Blueprint Investment Partners to sub-advise the ClearShares OCIO ETF responds.

Anatomy of a Bear Market

Posted on 5/19/2022
By Jon Robinson, Portfolio Manager, ClearShares OCIO ETF

There are numerous examples of words and phrases entering the lexicon, providing deep meaning for many years, but over time and with frequent use losing significance among the masses. The word or phrase itself didn’t change, but the meaning was diluted by changing circumstances.

I worry that “downside protection” has run through the watering-down process.

Positive Fixed Income Returns AND Low Volatility?

Posted on 4/26/2022
By Frank Codey, Portfolio Manager, ClearShares OPER ETF

Some investors may have seen an April 19 tweet from Eric Balchunas that summarized the current state of the fixed income ETF market in a lot fewer than 280 characters. His tweet calls out that a great majority of fixed income ETFs now have negative returns YTD, except for 10.

The ClearShares Ultra-Short Maturity ETF (OPER) came in at #8 on the list shown in the tweet, which was a screencap of the Bloomberg query run by Eric.

While the ClearShares team is very pleased with the performance of OPER ETF, the tweet does not reflect the whole story. No investment can be evaluated on return without a corresponding analysis of risk.

Market Predictions Are Trash

Posted on 4/21/2022
By Jon Robinson, Portfolio Manager, ClearShares OCIO ETF

Financial services dogma says that when each year turns to the next, asset managers are supposed to tell you where the S&P will close in 2022, which asset class will be the top performer, and where Treasuries are headed.

However, Blueprint Investment Partners, which is the sub-adviser of our OCIO ETF, refuses to do so.

To illustrate the important point that most market predictions are worthless, allow me to highlight some laughable predictions made by market “experts” over the years.


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