Valuable principles to guide wealth management

I spent the first eight years of my career in data analytics for retail banks. I loved it - there's nothing quite like a good cup of coffee, an Excel spreadsheet with lots of raw data and headphones.

- Matthew Matthee

In 2018, at the age of 34, I changed careers and entered the wealth management industry. Since then, I've worked with clients and invested through different market cycles.

Along the way, I've picked up a few principles I keep returning to, and they continue to guide how I approach my work today.

Here are five of them:

1. Targeting alpha (outperformance) is overrated

I've sat through countless fund manager presentations where the story is always the same: "We have the strategy that consistently outperforms the market. Our solution is the secret sauce."

My sense is that 95% of managers believe their solution is superior. They have the best process, the best portfolio, the most durable strategy.

The truth is that fortunes have been lost chasing alpha. I understand the desire to beat the market, but an obsession with alpha is dangerous. It often leads to unnecessary risks, constant portfolio changes, and a short-term mindset.