Why You Should Learn From the Many Diverse People Around You

Why You Should Learn From the Many Diverse People Around You

"The measure of a person,” says Mark Cover, “is not only how many people show up at his funeral, but how much variety there is in the group of people who show up.” The more variety, the richer the life.

“I’m not sure where I learned this,” he continues, “but somewhere in my twenties, I realized that I could learn from literally every single person I came into contact with. I think a lot of lives get short changed because many people don’t believe that.”

Related: Timeless Wisdom: The Golden Mean

Mark came from a rural farming community. Growing up, he had no idea what a real estate developer even was. No one would have ever predicted that he would become the CEO for a division of a multi-billion-dollar real estate development firm. He jokes that when he first graduated from college, all he had was a couple polyester suits, a smile, and debt. It is that humble beginning that taught him about the many opportunities available to someone with an open mind and a willingness to learn without preconceived judgments.

Although, at this point in this life, it would be easy for Mark to limit his contacts to business colleagues, investors and neighbors in his affluent neighborhood, he goes out of his way to cultivate relationships with diverse groups of people he wouldn’t typically run into in the normal course of a day. Every Sunday, he and his wife drive 35 minutes to a church that is in a neighborhood very different from their own. Sure, they could go to the church that is only a few minutes away. But, Mark doesn’t believe he can serve or learn as much close to home.

Parenting, Money  and a Learner’s Permit

One group of people Mark has had the pleasure of learning from are private wealth holders. Because of his career, Mark has had the opportunity to meet the ultra affluent and financially savvy. And he’s observed what wealth can do to family dynamics. Inheriting great sums of money doesn’t always lead to more freedom. In fact, Mark says many second- or third-generation wealth holders are “frozen in fear.” They are afraid they will mismanage the money and ruin their family’s legacy.

“That’s why,” he says, “I’m a big believer in enabling young people with a sense of wonder, excitement and optimism for their personal opportunity and ability to accomplish things that matter to them.”

He also believes that parents must reflect respect for their children from an early age and that is how he raised his four children (now adults). Mark and his wife had a parenting philosophy in which they openly talked with their children, shared insights and wisdom and “always gave them a little more rope than they expected.” For example, in Texas, you can get a learner’s permit when you are 15. So, Mark says he pushed each one of his children to get their learner’s permit as close to their fifteenth birthday as possible. Lots of other parents were terrified to have their children start driving in the big city, but Mark has always viewed things from the other side. “It’s your life,” he says. “It’s short. Go out and grab it by the horns. As long as it doesn’t hurt yourself or someone else, go for it!”

Laura A. Roser
Life Transitions
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Laura A. Roser is the #1 expert in meaning legacy planning. She is the Founder and CEO of Paragon Road, a company that assists individuals in passing on their non-financial as ... Click for full bio

An Emerging Theme In Thematic Investing

An Emerging Theme In Thematic Investing

Exchange traded funds (ETFs) are popular vehicles for market participants looking to engage in thematic investing. Thematic investing looks to take advantage of future growth trends, including disruptive technologies. Given that forward-looking approach, stock-picking in the thematic universe is equally as hard, if not harder, than in traditional market segments.

Go back to the late 1990s, before the bursting of the Internet/technology bubble. Back then, investors stood an equal chance of selecting E-Toys over Amazon or some no longer in existence networking equipment maker over Cisco.

“History is littered with examples of prospering industries with no indication of which company will come to dominate the industry,” according to Nasdaq. “This suggests that successful thematic investing is more about selecting baskets of investments rather than single securities.”1

The ALPS Disruptive Technologies ETF (DTEC) provides basket exposure to a broad swath of thematic investments. DTEC features exposure to not just one or two emerging technologies, but 10 such themes on an equal-weight basis.

Disruptive Efficiency

The 10 themes represented in DTEC are as follows: 3D printing, clean energy, cloud computing, cybersecurity, data and analytics, fintech, healthcare innovation, Internet of Things (IoT), mobile payments and robotics and artificial intelligence (AI).

Generally speaking, fund issuers have been quick to respond to disruptive and transformative technologies, bringing products to market to tap these themes. Prior to DTEC coming to market late last year, there were ETFs devoted exclusively to cloud computing, cybersecurity, robotics and other themes featured in DTEC. However, few use the basket approach to themes employed by DTEC.

Related: Getting Paid to Play The Energy Patch

February, a rough month for U.S. stocks, highlighted the advantages of DTEC's multi-theme methodology. Seven of the 10 themes found in the fund finished the month lower, but DTEC was able to outperform the S&P 500 on a monthly basis.

Focusing on individual themes can be rewarding over the long-term, but not all investors have the risk tolerance for such a strategy. Consider this: the Indxx Global Robotics & Artificial Intelligence Thematic Index jumped more than 48% in 2017. That type of performance is enough to seduce many investors, but that same benchmark slipped 7.60% in February, generating monthly volatility of 34.10%.Said another way, that robotics and AI index's February slide was more than triple the loss experienced by DTEC during the month.

More Advantages

While it probably is not accurate to call the indexes devoted to individual disruptive themes “old,” many use old school weighting methodologies. For example, the two largest components in the ISE Cloud Computing Index are Netflix, Inc. (NFLX) and Amazon.com Inc. (AMZN). Only two members of the S&P 500 have larger market values than Amazon while Netflix currently has a larger market cap than Wal-Mart (WMT) and McDonald's (MCD).

Holdings subject ot change as of 12/31/17

For its part, DTEC not only equally weights its 10 disruptive themes, but its 100 components as well, potentially reducing single stock risk in the process. As the chart below confirms, equally weighting stocks is rewarding across sectors and market capitalization segments.

Past performance does not guarantee future results

Annualized returns for the past 10 years show seven of the 11 S&P 500 sectors, when equally weighted, outperform cap-weighted equivalents, according to S&P. Three of those seven sectors – financial services, healthcare and technology – are prominent parts of DTEC's roster.

1 Source: Nasdaq Dec. 28, 2015 https://www.nasdaq.com/article/what-thematic-investing-is-and-its-strengths-and-risks-cm559209

2 Source: ETF Replay data


An investor should consider the investment objectives, risks, charges and expenses carefully before investing. To obtain a prospectus which contain this and other information call 866.675.2639 or visit www.alpsfunds.com. Read the prospectus carefully before investing.

An investment in the ALPS Disruptive Technologies ETF (DTEC) may be subject to substantially greater risk and volatility than investments in larger and more mature technology companies.

There is no assurance that the market developments and sector growth based upon the themes discussed in the article will come to pass.

ALPS Disruptive Technologies ETF shares are not individually redeemable. Investors buy and sell shares of the ALPS Disruptive Technologies ETF on a secondary market. Only market makers or “authorized participants” may trade directly with the Fund, typically in blocks of 50,000 shares.

ALPS Advisors, Inc. (AAI) has engaged IRIS Werks, LLC (IRIS) to produce analysis and commentary on ALPS-advised ETFs. IRIS currently has a compensated business relationship with AAI. AAI is not affiliated with IRIS.

The content and opinions expressed in this article are that of the author and not the views and opinions of AAI.  In addition, AAI assumes no responsibility to ensure the accuracy of the content written by the author.

There are risks involved with investing in ETFs including the loss of money. Additional information regarding the risks of this investment is available in the prospectus. Past Performance is not indicative of future results.

The fund is new and has limited operating history.

ALPS Portfolio Solutions Distributor, Inc. is the distributor for the ALPS Disruptive Technologies ETF. AAI is affiliated with ALPS Portfolio Solutions Distributor, Inc.

The author is not an investment professional and this article should not be considered investment advice. While the information and statistical data contained herein are based on sources believed to be reliable, the author takes no responsibility to ensure the accuracy of the content. Additionally, this article should not be relied on or be the basis for an investment decision. Information that is historical is not indicative of future results, and subject to change.

S&P 500®: A capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

S&P SmallCap 600®: A capitalization-weighted index that measures the small-cap segment of the U.S. equity market.

S&P MidCap 400®: A capitalization-weighted index that measures the mid-cap segment of the U.S. equity market.

Indxx Global Robotics & Artifical Intelligence Thematic Index: The Indxx Global Robotics & Artificial Intelligence Thematic Index is designed to track the performance of companies listed in developed markets that are expected to benefit from the increased adoption and utilization of robotics and Artificial Intelligence ("AI"), including companies involved in Industrial Robotics and Automation, Non-Industrial Robots, Artificial Intelligence and Unmanned Vehicles.

Tom Lydon
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IRIS Co-Founder and Editor and proprietor of ETFtrends.com. Tom is a frequent contributor to major print, radio and television media including Forbes, The Wall Street Jou ... Click for full bio