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You've got to love this. What kind of an invester are you? What Muppety character additions would you make to this list?
Are you a “Muppet” investor?
Investors were recently left wondering whether they were “Muppet” investors, when they heard that one major financial institution has been referring to its clients as “Muppets.”
So it got me thinking. Am I a Muppet investor?
Those adorable Jim Henson characters would each have their own idiosyncrasies if they were managing an investment portfolio, so where does my investment style fall?
Kermit is a small-town frog always looking out for the greater good. He is careful with money because he knows it can be hard to obtain and even harder to hang on to. Kermit is cautious and subscribes to common-sense risk management approaches—managing the downside. He appreciates the standards of fiduciary duty and sticks to traditional portfolio strategies. His portfolio might be invested in bonds, stocks and a modest dose of alternative investments.
Miss Piggy is somewhat self-centered, superficial and shallow. Her focus is on spending money, not earning it, and her preference is for short-term cash-based compensation. As a fund manager, she might be focused on building assets under management (for prestige, not efficiency) and on fund performance relative to portfolio benchmarks—the driver of her incentive compensation.
Statler and Waldorf are the old curmudgeons in the market. They like things done the traditional way—no hedge funds, derivatives or alternative investments for them. Their portfolio might consist of war bonds, blue chip equities and treasury bonds. Come to think of it, it may be that the curmudgeons won’t have done so badly given recent market conditions!
Fozzie is not exactly the smartest bear in the sleuth. He is a bit childlike in his approach and has a limited attention span when it comes to serious matters. He is a short-term investor and, as a result, is always chasing yesterday’s top-performing asset class. We’ve all heard of investors like him—the stereotypical retail investors who supposedly make disciplined institutional investors look good.
Gonzo is in love with a chicken and enjoys being shot out of a cannon. If thrills are what you’re after, Gonzo represents your management style—always willing to try out those new adventurous investments. He’ll be testing out the frontier markets, unsecured debt and undeveloped property. His style may not satisfy the “prudent person” criteria, but the entrepreneurial mind with excess funds to invest may wish to consult with him.
Finally we have Rizzo, the stereotypical New Yorker. He’s always willing to make deals under the table and come up with money-grabbing schemes. If you have this guy managing your money, you’d better ensure that your compliance department is willing to work long hours keeping an eye on him.
So what kind of Muppet investor are you? Some of these investment styles might in fact work quite well, while others not so much. Perhaps it’s time to stand up and declare what kind of Muppet investors we are.
http://www.benefitscanada.com/?p=27870