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June 19, 2018 | Would You Accept Portfolio Advice from William Shakespeare?

Adrian Mastracci

Adrian Mastracci, Discretionary Portfolio Manager, B.E.E., MBA. My expertise in the investment and financial advisory profession began in 1972. I graduated with the Bachelor of Electrical Engineering from General Motors Institute in 1971. I then attended the University of British Columbia, graduating with the MBA in 1972. I have attained the “Discretionary Portfolio Manager” professional designation. I am committed to offering clients the highest standard of personal service by providing prompt, courteous and professional attention. My advice is objective, unbiased and without conflicts of interest. I’m part of a team that delivers comprehensive services and best value in managing client wealth.


Investors believe that portfolio strategy is a modern creation.

My Take:

Historical accounts of yesteryear paint different viewpoints.


Wonder back a few centuries to appreciate theories of today.

“In giving advice seek to help, not to please, your friend.”
― Solon, (638 BC–559 BC), Greek lawgiver & politician

You are probably wondering what on earth William Shakespeare, the highly renowned English poet and playwright, has to do with dispensing portfolio advice. After all, he was around more than four centuries ago. Let the short story unfold.

Investors think of portfolio management strategies as modern day creations. Particular emphasis is directed to findings of the last fifty years. This area of study is commonly referred to as “Modern Portfolio Theory”, or “MPT” for short.

For example, Benjamin Graham is considered the father of value investing. His bestseller book titled “Security Analysis”, co-authored in 1934 with David Dodd, is still a course staple at various business schools. As an aside, Warren Buffett was a student of Benjamin Graham.

Investors typically think of portfolio management as being a modern day creation, developed mainly during the last century.”

Adrian Mastracci

Many investors focus their attention on books, magazines, newsletters, educational papers and blogs devoted to MPT issues. The internet, television, radio, print and social media outlets cater to an array of MPT needs. The list keeps growing daily by leaps and bounds.

Moreover, today’s investors and professionals have a wide assortments of MPT tools at their disposal. Virtually anyone can track, analyze, select, benchmark, monitor and implement every imaginable portfolio nuance. Conversely, it is very easy to become mired in MPT matters.

However, you may be surprised to discover that portfolio theory is far from modern. It does not have to be complex to be effective. Further, nobody needs to become overwhelmed in MPT.

In fact, portfolio theory sports a long and rich history, spanning centuries. Its fundamental pillars have remained much the same. Even though countless tweaks have been made over time.

Shakespeare’s insights
A while back, I revisited some plays that I had studied during my days of high school English classes. “The Merchant of Venice”, a comedy written over four centuries ago by William Shakespeare, (1564–1616), comes to mind.

I rediscovered one notable excerpt from that play. A concise and insightful situation. It ought to interest practically every investor who thinks long-term.

Let us turn the hands of time back to the days of Shakespeare and focus on the plight of Antonio, the Merchant of Venice. This passage was spoken early in Scene 1 of the play:

But tell not me; I know, Antonio
Is sad to think upon his merchandise.

Believe me, no: I thank my fortune for it,
My ventures are not in one bottom trusted,
Nor to one place; nor is my whole estate
Upon the fortune of this present year:
Therefore my merchandise makes me not sad.

Stop right there. Read it once more. Were he living today, Shakespeare would make a shrewd portfolio manager. I would happily encourage him to become a member of our team. I would empower him to continue dispensing that same eloquent portfolio advice from his day.

Even four centuries ago, Shakespeare professed the sage benefits of diversification. Antonio’s portfolio had various ships, heading to several destinations, with different cargo and spread out over time. A high priority for portfolios continues to be the assessment of what is prudent and sufficient diversification for each case.

Shakespeare’s wisdom is classic, sensible advice for the nest egg. It is also logical and straightforward. Had the Nobel Prize existed in his day, Shakespeare would surely have been nominated for his portfolio insights. Plus, he had skills to blend portfolio strategy into his play.

Time tested practices
Classic investment practices from long ago point to considerable common sense. I highlight a few:

  1. Shakespeare’s portfolio insights have truly survived the tests of time. Something all investors aspire for the nest egg, especially retirement. Keep your eyes firmly on the objectives you seek. Slow and steady gets you to the desired ballpark.
  2. Refrain from reinventing the investment wheel. The more things change, the more they stay the same. The approach to your plan of action is not materially different today as compared to one from centuries past. You have access to far more options and added distractions.
  3. Methodical and logical decisions are best. Spread long-term investing risks by diversifying broadly. Develop and follow a sensible asset mix. Park your emotions at the door. It is a simple and effective base to adopt.
  4. His advice on diversification is core portfolio strategy. It helps achieve and sustain investing success while keeping complexity in check. As in Antonio’s day, it also reduces the chances of the nest egg making you sad.

My take is that present portfolios benefit from applying fundamentals developed in centuries past. Vintage portfolio theory, perhaps, but very modern in its early days. Your mission is to make sense of bumps, curves and potholes that develop along your chosen path.

The broadly diversified approach of yesteryear is still superb, timeless, invaluable advice for your MPT needs. Choose solid, yet simple, foundations that support your financial castle throughout the long journey.

I say accept the portfolio advice. Shakespeare would be proud.

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June 19th, 2018

Posted In: Adrian Mastracci Blog

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