Brian Portnoy

The Power of Simplicity in a world of Overwhelming Choice

The Investor's Paradox delivers a road map to investors overwhelmed by the complexity of markets and the innumerable choices before them. Fund companies, advisors, and pundits offer countless recommendations for investors. But how to sort through it all? Written by a seasoned investment expert in language accessible to all, The Investor's Paradox fills a wide void in the literature for those seeking the right path forward, one that is neither overly technical nor oversimplified. Finding simplicity in a complex world isn't necessarily easy, but the payoff is enormous.


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About the

book

Investors are in a jam. A troubled global economy, unpredictable markets, and a bewildering number of investment choices create a dangerous landscape for individual and institutional investors alike. To meet this challenge, most of us rely on a portfolio of fund managers to take risk on our behalves. Here, investment expert Brian Portnoy delivers a powerful framework for choosing the right ones – and avoiding the losers.

Portnoy reveals that the right answers are found by confronting our own subconscious biases and behavioral quirks. A paradox we all face is the natural desire for more choice in our lives, yet the more we have, the less satisfied we become – whether we’re at the grocery store, choosing doctors, or flipping through hundreds of TV channels. So, too, with investing, where there are literally tens of thousands of funds from which to choose. Hence “the investor’s paradox”: We crave abundant investment choices to conquer volatile markets, yet with greater flexibility, the more overwhelmed and less empowered we become.

Leveraging the fresh insights of behavioral economics, Portnoy demystifies the opaque world of elite hedge funds, addresses the limits of mass market mutual funds, and discards the false dichotomy between “traditional” and “alternative” investments. He also explores why hedge funds have recently become such a controversial and disruptive force. Turns out it’s not the splashy headlines – spectacular trades, newly minted billionaires, aggressive tactics – but something much more fundamental. The stratospheric rise to prominence and availability of alternative strategies represents a further explosion in the size and complexity of the choice set in a market already saturated with products. It constitutes something we all both crave and detest.

The Investor’s Paradox lights a path toward simplicity in a world of dangerous markets and overwhelming choice. Written in accessible, jargon-free language, with a healthy skepticism of today's money management industry, it offers not only practical tools for investment success but also a message of empowerment for investors drowning in possibility.

About the

author

Brian Portnoy, Ph.D., CFA, has been successfully investing, researching, and educating on hedge funds and mutual funds for the past fourteen years. He is currently the Director of Investment Education at Virtus Investment Partners. In that role, Brian writes and speaks about all things investing, including decision making, risk management, investor psychology, and manager due diligence. Previously, he held senior investment and strategy roles at Chicago Equity Partners, a $10 billion asset manager; Mesirow Advanced Strategies, a premier global fund-of-hedge-funds; and at Morningstar, the world's top research shop on mutual funds. He has spoken at investing conferences across the U.S., Europe, and Asia, and has appeared frequently in major media outlets such as CNBC, the Wall Street Journal, and the New York Times. Brian has lectured on hedge funds at U.S. Securities and Exchange Commission as part of their "Leading Authors" series. Prior to his investing career, Brian pursued his research and teaching interests in political economy and markets at the University of Chicago, where he earned his Ph.D. in 2000. Brian is a CFA Charterholder and a member of the CFA Society of Chicago. He is also a member of the Economic Club of Chicago. Brian lives on the north side of Chicago with his wife and three children.


Endorsements
“There are a dozen or so classic books on picking stocks, a task relatively few individual investors do today. In contrast, there have been no great texts—until now—explaining how to pick fund managers, a task almost every investor, from the richest hedge fund buyer to the smallest 401(k) participant is tasked with doing. Brian Portnoy has produced the first great text on picking fund managers. It not only includes decades worth of valuable insights, it’s also one of the best written investment books you’ll ever find.”

Don Phillips, Morningstar

“The investment bookshelves are littered with recommendations on picking stocks and allocating assets. The Investors’ Paradox addresses the far more relevant topic of manager selection, and it does this superbly. Building from his deep understanding of human behavioral biases, Portnoy’s structured approach to evaluating skill cuts through the noise of past performance and marketing materials to deliver a clear and creative framework for choosing investment advisors. Also a gifted writer, Portnoy has written a classic. Highly recommended for anyone making investment decisions.”

Mark Carhart, Chief Investment Officer, Kepos Capital

“The Investor’s Paradox has arrived at just the right time. We face an unprecedented amount of choice in implementing investment strategies, and this insightful book helps filter out the noise to home in on what matters when making these critical decisions, whether you are a sophisticated allocator or an individual investor. I can’t think of a better book on how to choose the best investment experts.”

Ted Seides, Co-Chief Investment Officer and President, Protégé Partners

“The Investor’s Paradox is totally original, thoroughly engaging, and remarkably well written. It must be considered an important contribution to the literature on how we make decisions about investments in the real world. This book is consistently insightful and often entertaining, offering many examples based on Portnoy’s broad experiences. Novice and expert investors alike should take heed of Portnoy’s major accomplishment.”

Emmanuel Roman, CEO, Man Group



Coca-Cola Freestyle and the Nightmare of Too Much Choice

Source: Forbes.com

July 10th, 2014

The countless little choices add up -- and it's exhausting.

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On Questioning Alternative Investments

Source: Wall Street Journal / WSJ.com

June 6th, 2014

Questions to be raised by financial advisors regarding buying alternatives.

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5 More Reasons the New Yorker Is Wrong About Hedge Funds

Source: Forbes.com

June 5th, 2014

Let's keep the debate on hedge funds sober and fact-based.

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3 Reasons the New Yorker Is Wrong About Hedge Funds

Source: Forbes.com

May 27th, 2014

Taking issue with a litany of well-worn claims.

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Buffett's Bad Advice

Source: Forbes

April 28th, 2014

Going "passive" doesn't mean you haven't made a choice.

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Due Diligence in the Age of Convergence

March 24th, 2014

The vocation of picking the right fund managers has changed, for better or worse.

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Cut to the Quick on Good Investment Decisions

Source: StockIdeas.org

March 22nd, 2014

It's less complicated than many make it out to be.

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4 Questions To Help Guide Your Investment Choices

Source: Amazon Money & Markets

March 11th, 2014

Get past stale checklists and focus on what really counts.

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Picking Funds in an Industry Crowded With Choice

Source: Morningstar Magazine

March 4th, 2014

An extensive interview by Morningstar Investment Services CEO Jeffrey Ptak

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3 Ways to Simplify Your Money Life

Source: MarketWatch

January 15th, 2014

Be proactive, skeptical, and patient.

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It's All About Expectations

Source: Hedge Fund Intelligence

January 14th, 2014

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Featured in "How to Suss Out Your Hedge Fund" by Joshua Rogers

Source: Forbes.com

April 1st, 2013

Cutting through unfortunately popular nonsense on hedge funds

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The Only Truth in Markets is Surprise

Source: Musings of a Tape Reader

April 29th, 2014

Nice discussion of Expectations Management and The Investor's Paradox.

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Review of The Investor's Paradox

Source: Aleph Blog

April 28th, 2014

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Worth Magazine Features "The Investor's Paradox"

Source: Worth

March 4th, 2014

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"Winter Finance Book Round Up"

Source: Abnormal Returns

March 3rd, 2014

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Quoted in "The growing case against ETFs" by Chuck Jaffe

Source: MarketWatch

February 23rd, 2014

Why “better” investments may not be safer

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Book Review: BlogCritics

Source: BlogCritics.org

February 18th, 2014

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Book Mention

Source: littlefishFX

February 18th, 2014

A giveaway contest (!) for The Investor's Paradox

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Quoted in "The Power of Choice" by Dr. Helen Smith

Source: PJ Media

February 17th, 2014

What's the right amount of freedom?

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Book Review

Source: Seattle Post Intelligencer

February 17th, 2014

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Book Review

Source: Stocker Blog

February 15th, 2014

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"Links Between Hedge Funds and Mutual Funds"

Source: Philadelphia Inquirer

February 13th, 2014

Distinguish between the risks in your fund and the packaging it comes in.

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Book Profile

Source: MoneyMatters101.com

February 8th, 2014

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"On the Bookshelf"

Source: Abnormal Returns

February 3rd, 2014

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Book Profile

Source: SmartBooks.com

January 28th, 2014

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Book Profile

Source: FSB Media

January 27th, 2014

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Know Your Financial Blind Spots

Source: Forbes.com

March 17th, 2014

Regret and envy are unavoidable elements of investing.

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Interview on The Investor's Paradox

Source: The Michael Dresser Show

March 4th, 2014

Michael and Brian discuss the challenges to sound investing.

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The Zen of Investing

Source: Business Book Talk

March 3rd, 2014

Bob Garlick and Brian have a "coffee shop" chat about behavioral finance

Play Audio

Why Too Many Mutual Funds Spoil the Investor

Source: TheStreet.com

February 28th, 2014

An interview about mutual funds, liquid alternatives, and smart approaches to portfolio building.

Play Video

Money Life Show with Chuck Jaffe

February 14th, 2014

Senior MarketWatch columnist Chuck Jaffe and Brian have a wide ranging conversation about fund investing.

Play Audio

 

Forthcoming: British Virgin Islands 1st Annual Wealth Management Summit

November 20th, 2014

"The New Age of Financial Advice"

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Forthcoming: Foundation Financial Officers Group (Boston)

October 23rd, 2014

"Investor Behavior in an Era of Turbulent Markets and Too Much Choice"

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Forthcoming: Financial Planning Association of Houston

September 25th, 2014

"Solving the Investor's Paradox"

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Forthcoming: Huntington Asset Services Annual Client Forum (Columbus)

September 15th, 2014

"Solving the Investor's Paradox"

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Morgan Stanley Advisor Forum (Atlanta)

August 21st, 2014

"Be Careful What You Wish For: Managing Expectations In Life and Investing"

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Wharton Hedge Fund Network Forum (New York)

August 5th, 2014

"Foxes, Hedgehogs, and Hedge Funds: Connecting Buyers and Sellers of Complex Products"

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Sector Asset Management Hedge Fund Conference (Oslo, Norway)

June 17th, 2014

"Solving the Investor's Paradox"

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Credit Suisse 6th Annual Hedge Fund Leadership Conference (Hong Kong)

June 10th, 2014

"Foxes, Hedgehogs, and Hedge Funds: How to Attract and Retain Capital in Ultra-Competitive Markets"

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Worth Magazine Leading Wealth Advisors Summit (Chicago)

June 2nd, 2014

"Be Careful What You Wish For: Managing Expectations in Life and Investing"

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Nomura/Instinet Global Quantitative Investment Strategies Conference (New York)

May 15th, 2014

"Miles Davis Was a Hedge Fund Manager: The Science of Making Things Up"

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CFA Society of Houston

May 14th, 2014

"Fireside Chat" on Decision Making and Investing

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CFA Societies of Dallas and Fort Worth

May 13th, 2014

"Finding Simplicity in a World of Dangerous Markets"

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CFA Society Chicago

March 18th, 2014

Monthly Book Club Series: Discussion of The Investor's Paradox

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Worth Magazine Leading Wealth Advisors Summit (Los Angeles, CA)

March 10th, 2014

"Bad Wine, Bronze Medals, & Velvet Ropes"

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Morningstar Ibbotson Conference (Phoenix, AZ)

February 21st, 2014

"Jazz, Firefighters, & Hedge Funds"

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Securities Traders Association of Chicago (STAC) Winter Meetings (Chicago, IL)

January 23rd, 2014

Panel discussion on "Trader Tendencies, Group Think, & Investor Behavior"

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Securities and Exchange Commission's "Leading Authors Series" (Washington, DC)

January 10th, 2014

"Hedge Funds, History, & Hysteria"

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University of Massachusetts-Amherst Graduate Finance Program

November 14th, 2013

"Conventional and Unconventional Notions of Alpha in Manager Due Diligence"

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Rothstein Kass West Coast Private Funds Forum (San Francisco, CA)

October 24th, 2013

Round table on the current state of hedge fund investing

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Arete Wealth Management Conference (Annapolis, MD)

May 7th, 2013

"Foxes, Hedgehogs, and Hedge Funds"

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Deutsche Bank Emerging Managers Symposium

April 9th, 2013

Panel discussion "Key Decisions in Operational Due Diligence"

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