Who is Mark Salzinger?
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As the editor and publisher of The No-Load Fund Investor since 2003 and of The Investor's ETF Report since its October 2006 launch, Mark Salzinger writes or oversees all the content in the newsletters. He alone decides which no-load mutual funds and ETFs to recommend and put into one or more of the newsletters' Best Buys model portfolios. For a decade, Mark served as executive editor of Louis Rukeyser’s Wall Street and Louis Rukeyser’s Mutual Funds, where he worked closely with Louis Rukeyser to provide expert, unbiased investment guidance to hundreds of thousands of investors. (For insight into Mark's investment philosophy, see "Lou, Mark and You," below.)
Mark has authored or edited literally hundreds of articles and special reports on mutual funds, ETFs, individual stocks, bonds and investment strategies. Considered one of the most insightful analysts on the mutual-fund/ETF scene, Mark has an investment Rolodex few fund researchers can match: he has interviewed virtually all of the past decade’s greatest mutual-fund managers. A former investment associate at investment manager J. & W. Seligman, Mark also served as a senior mutual-fund investment analyst at Citigroup. He is one of the few mutual-fund experts to know funds as a former insider and now as an unbiased observer.
One of today’s most sought-after experts for individual investors, Mark has been quoted or featured in various major publications and websites, including The Wall Street Journal, Investor’s Business Daily, The New York Times, The Chicago Tribune, Registered Representative, MarketWatch and Bottom Line Retirement.
Mark earned his MBA in finance and marketing from Cornell University in 1992. He earned his B.A. degree in economics, with honors, from The University of Chicago in 1988.
The No-Load Fund Investor is committed to maintaining the outstanding record Sheldon Jacobs produced in his quarter century of leadership. USA Today called Sheldon the "dean of the no-load fund-watchers." He earned that accolade by championing no-load funds ever since he wrote the first successful book focusing on no-loads back in 1974. For a quarter century, he served as the editor and publisher of the highly acclaimed No-Load Fund Investor advisory newsletter.
Nobody worked as closely with Louis Rukeyser in the last decade of his life as did Mark Salzinger, publisher and editor of The No-Load Fund Investor and The Investor's ETF Report. Below, Mark reveals how the investment philosophy espoused by Lou in his newsletters, television programs and in conversation intersects with Mark's own investment philosophy and, by extension, how it could impact your own portfolio.
When Louis Rukeyser passed away on May 2, 2006, at the age of 73, the financial and entertainment media responded with an outpouring of obituaries and commentaries expressing an appropriate appreciation for the late financial and economic commentator’s life and work. Several of the former panelists and special guests of Lou’s long-running television program authored touching tributes to Lou, who in addition to launching financial broadcast journalism, wrote several books and edited the most popular financial advisory ever, Louis Rukeyser’s Wall Street.
I became the managing editor of the Louis Rukeyser’s Wall Street newsletter and its companion publication, Louis Rukeyser’s Mutual Funds, in early 1995. A year or so later, I was promoted to executive editor and (concurrent with the first 20 months of my posts at the Investor) ran both of Lou’s newsletters in his absence from late 2003 through mid-2005. Though Lou himself provided the overall market outlook and broad strategies for his newsletters, he and I conversed regularly about specific securities and many other financial matters until he became ill.
It’s natural, then, that my investment and portfolio-management philosophy, reflected in my newsletters' pages month after month through commentary, analysis and specific recommendations, incorporates some of Lou’s financial beliefs.
It was typical of Lou’s detractors to describe him as a cockeyed optimist who rarely, if ever, advised the reduction of one’s equity positions. This criticism missed the distinction Lou made between short-term and long-term investing. While Lou recognized that stocks could, and often did, decline scarily in the short run, he believed that long-term investors would have the best chance to prosper if they ignored the short-term scares. Instead, he supported the patient accumulation of quality stocks and stock funds, and advised selling only when investors found truly superior alternatives or when changing financial needs and circumstances increased the need for short-term financial stability.
In large part, I agree with this basic philosophy. Too many investors get scared out of sound asset allocations and specific investments because of temporary issues in politics, the economy, the markets or specific funds and companies. Too many investors hang on to each day’s news, forgetting that financial journalists are no more immune than most other journalists to the seduction of scare headlines. Most of the noise in the market is negative. So, if you focus on the noise, your own views will likely skew toward the pessimistic and cause you to have too little, or even nothing at all, in stock funds and ETFs.
Lou knew that there are always big reasons not to buy stocks and stock funds: Terrorism and war…budget and trade deficits…corporate and mutual-fund scandals, just to name a few. He also knew that investors who get scared away by these types of issues miss out on the enormous gains that can result from American companies that produce incredible innovation and profits despite their own challenges and those faced by America and the world at large.
Unlike some other newsletter editors, I rarely, if ever, discusses structural deficits in the U.S. or whether or not the savings rate or consumer-confidence number was up or down a little more than expected one month. I rarely, if ever, report on corporate scandals. I avoid politics unless an issue arises that truly has the potential to impact the returns of various investments. I never sell on one day’s news (or even a month’s news, generally). Instead, my Best Buys portfolios reflect patience and a belief in the underlying resilience of innovation, tempered by analysis of the truly important macro factors that impact returns: valuations, earnings, interest rates, inflation, economic growth, financial strength, risk preferences and investor sentiment.
Though Lou favored large ‘growth’ stocks, he recognized that there are many ways to make money in the stock market. This, too, is reflected in our Best Buys portfolios. While many other financial advisories stick explicitly to a specific investment approach (e.g., small ‘value’ stocks, turnarounds, momentum, sector-specific), we are eclectic. Within a diversified framework, I generally prefer value investing because I think it provides the best risk-adjusted return over time. But we may favor growth within Best Buys if the style is attractively priced versus value. We even diversify within various types of value and growth investing, and we’ll shade Best Buys toward whichever market cap offers superior appeal at any point in time.
Lou disparaged the so-called technical approach, which purports to forecast future action in the market and specific stocks by analyzing price and volume patterns. Lou believed that while technicians could provide a picture of where the market had been, they were no better than others at forecasting its future course.
Like Lou was, I am a fundamental investor. While price and volume patterns can be recognized with hindsight, I’ve yet to find a technical analyst anywhere who has had consistent success forecasting the future based on the past. Though I consider a fund’s or ETF's momentum before adding it to or removing it from Best Buys, I emphasize the quality of the investment and its manager, the potential for such quality to be sustained, and the role the fund or ETF can play in a specific Best Buys portfolio. I recommend portfolio diversification, and like Lou believed, I believe that some mutual-fund managers have enough skill to beat the market for extended periods.
Like Lou did, I reject the belief that risk is simply a matter of volatility. Lou was fond of saying that the greatest risk to investors was avoiding short-term risk in its entirety, because doing so would virtually guarantee the degradation of purchasing power in one’s portfolio and increase the likelihood of outliving one’s assets. He also believed, correctly, that the market often rallied the strongest after an extended fall, when short-term risk seemed high and few so-called experts predicted a rise in the market.
Lou recognized that a stock market humbled by a weak economy tended to rally well in advance of any obvious economic improvement. Investors who miss these upward moves sacrifice a great deal of the benefits of the market’s long-term upward trend. In fact, short-term uncertainty itself is the very reason investors can be rewarded over the long run.
I generally recommend that even retired investors maintain meaningful positions in stock funds or ETFs. I tend to trim our recommended equity allocations as stock prices rise and valuations become stretched, while adding to them as stock prices fall and valuations become more attractive. Before recommending a specific fund or ETF, I consider its price volatility but also factor in various other factors that can impact its performance. These factors include sensitivity to the fluctuations of the broad market (beta), diversification and concentration, valuation, and how the fund or ETF is likely to respond to various economic, cyclical or psychological factors in the market.
One of Lou’s most admirable qualities was his sincere desire to increase the confidence of regular folks in their ability to build wealth through investing in the stock market. He combined this mission with a mature view of the professional world of Wall Street, which he correctly pegged as resembling the rest of the country: the crooks are easily outnumbered by the law abiding. Lou counseled that smart investors don’t let scandal intimidate them from investing in quality stocks and stock funds. This continues to be excellent advice.
Though Lou associated with a number of Wall Street stars, he always remembered his viewers and readers, most of whom were individual investors. He tried to help the common man and woman understand how to make money, and he counseled his viewers and readers to avoid getting swindled by the perennial pessimists and other fast talkers the media loves to extol when times get tough. Especially through quality no-load funds and ETFs, individual investors can do just fine in the stock market over the years, even if they don’t know exactly what the Dow will do seven days from Tuesday. And as Lou himself loved to say about his fans, who deserves it more?
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