Diversification in Portfolio Construction: Natixis’ John Hailer Discusses the Importance of a Wide-Ranging Portfolio
When the 2008 Housing Crisis fully manifested and caused the bubble to burst, leaving many in economic ruin, some were skeptical that we would ever recover. Now years later, individuals like John Hailer are helping to make sure that a repeat does not happen again, especially for their individual clients.
John Hailer is the President and Chief Executive Officer of Diffractive Managers Group, a position he picked up after spending 18+ years as the CEO of Natixis Global Asset Management for The Americas & Asia.
In his position as an industry leader and CEO of Natixis John Hailer oversaw several key ways that his clients could build better portfolios in the future. Let’s explore those concepts together.
Protecting Assets With Long-Term Investments
If your first experience with the financial world was through the ’08 housing crisis and its corresponding financial downturn, it’s easy to understand why you would have trust issues. Hailer echoed this idea himself during an interview, “It’s easy to tell investors that they should focus on the long-term. But as an industry, we need to get better at building the types of investment portfolios that help investors get there.”
For Hailer, his first experience in the financial field felt like a failure. Fresh out of college, Hailer and his teammates lost sight of the risk-averse nature of a diverse and wide-ranging portfolio.
John Hailer said, “We failed people. This never should’ve happened. If investor’s portfolios were properly diversified, we would have seen much more resilience.”
To offset this potential fault-line failure, Hailer suggests a diverse portfolio that features varying levels of risk and volatility.
Using the Proper Professional Tools & Resources
We are living in the gilded age of information, but that doesn’t mean that all info is the right info. Hailer pointed to fun classification systems as one of the most important drivers of transparency in the industry. Hailer added that they were not perfect, however.
Hailer stated, “Rating systems are great for transparency and great for investors. But investors need financial professionals to help utilize them.”
As an example of how to properly utilize tools like the classification system, Hailer gestured toward a portfolio featuring only the highest-rated funds as a potential failure. The portfolio is built on input rather than risk and it doesn’t account for how well the varying funds will work together.
Aiming For a Brighter Future With Consultation Services
At the end of the day, John Hailer hopes that, through his work with Natixis and Diffractive Managers Group, customers can feel like they have been picked first. Hailer says, “I don’t care whether you are an executive, an employee, or a portfolio manager – the first thing that should come to mind is the person that gave us that dollar to invest.”
To make good on his promise and hope for a more fulfilled customer, investment expert John Hailer oversaw the creation of the Durable Portfolio Construction Research Center, which was expanded to include a global organization of consultants. Offering free portfolio services, Hailer was able to use DPCRC to engage with new clients while gaining trust and placing them in a position to succeed in the future.