Investing: Is it an art or a science?

Is investment management an art or a science? We think it's both.
Investing - Is it an art or a science?

Do you consider your Financial Advisor more of an artist or a scientist?

The definition of science is the systematic study of structure and behavior of the physical and natural world through observation and experiment. Money management fits this definition – one of the primary roles in investing money is studying asset classes, such as US Stocks, International Stocks, Commodities and Bonds, and using historical returns, standard deviation, and correlation of returns to build an investment portfolio with the optimal level of risk versus return for each investor’s individual circumstance. That can certainly be seen as science.

But, like most experts in their field, a Financial Advisor should also be an artist. The definition of art is something created with imagination and skill which is beautiful or expresses important ideas or feelings. Is an investment portfolio beautiful? It is when it achieves what the investor wants and allows them to enjoy a secure future. The imagination part comes from the advisor’s ability to anticipate the future. What unknowns should we prepare for? How can we help the client manage turbulent times without selling? How do we manage the good times without allowing greed to tempt us and take too much risk?

There are many questions a Financial Advisor must answer and most of them warrant creative and unique answers and are not driven solely by science:

  • Which investments belong in retirement accounts?
  • What account type should you use when adding money while saving?
  • Which account should you withdraw money from when income is needed?
  • How do you diversify a portfolio while keeping trading costs low?
  • How do the past experiences and personal preferences of the client effect the portfolio and how?

A Financial Advisor requires education, research, experience, and imagination when answering these questions. If you could merely plug facts into a computer and generate the right answer every time, then a scientifically-based Robo Advisor could do the job. However, while computers can be a great tool for the Advisor, they lack the imagination necessary to personalize the output and consider the subjective inputs.

It is the art of financial advice that makes being a financial professional rewarding and challenging to us, as well as beneficial and unique to you.

Important Disclosure: Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Curio Wealth, LLC [“Curio Wealth”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Curio Wealth. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Curio Wealth is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Curio Wealth’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at Please Note: Curio Wealth does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Curio Wealth’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please Remember: If you are a Curio Wealth client, please contact Curio Wealth, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.

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