Wednesday, September 26, 2007

Passive vs. active verbs: Following up BSAS Investment Commentary Class

Can you show me an example of passive vs. active verbs?

That question from a participant in my BSAS class on "How to Write Investment Commentary That People Will Read" sparked my decision to publish the article below from my Investment Writing e-newsletter.


Sentences featuring active verbs typically have more oomph than their passive counterparts. You can also ratchet up your sentences' appeal by using colorful active verbs, such as "ratchet."

Here’s a quick test. Which of the following sentences uses an active verb?

  1. The announcement of a peace treaty sparked a stock market rally
  2. The stock market rally was caused by the announcement of a peace treaty.
Yes, it’s sentence number one. In sentence number two, the use of "was" -- a form of "to be" -- betrays the sentence’s passivity.

Still confused? Check out this explanation of active vs. passive verbs.

Scroll down to the fourth section, “Changing Passive to Active” for hints on how to purge your sentences of passivity.

I must thank Karyn Greenstreet’s Passion for Business e-newsletter for bringing this grammar web page to my attention.

I like this related tip from Richard H. Weiss' "How to be your own best editor,": "Use powerful verbs. Underline all the verbs in your copy. Did you find a bunch of 'is' and 'are' constructions? Can you replace those words with verbs that convey momentum and action?"

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Tuesday, September 11, 2007

"How to Write Investment Commentary Your Clients Will Read," Sept. 24 BSAS program

You invest a lot of effort in writing your quarterly client letter or commentary. Wouldn't it be nice if your clients actually read it? Some simple, quick tips can spice up your commentary without landing you in trouble with your Compliance Department. "How to Write Investment Commentary Your Clients Will Read," an interactive program, will teach you to make your text reader-friendly without stripping it of meaty content.

Register for this program led by Susan Weiner, CFA on the Boston Security Analysts Society website. If you can't attend the September 24 program, contact Susan to present customized training at your company.

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Sunday, September 09, 2007

Has backtesting really become respectable in the investment world?

"Backtesting may be more powerful than ever."

This excerpt from an article title in CFA Magazine stunned me. When I started learning about investment management in the 1980s, backtesting totally lacked credibility. It appears that clients, marketers, and data providers are responsible for an attitude shift.

"Despite widespread skepticism about backtesting on the part of financial professionals, it has become an indispensable marketing tool because clients demand it," according to "Making the Grade? Despite lingering skepticism, backtesting may be more powerful than ever" by Christopher Wright in the July-August issue of CFA Magazine.

Another factor, said Wright, is the proliferation of enormous high quality databases from providers such as FactSet, Quantitative Analytics, and TradeStation.

What do you think about backtesting?

Sept 23. comment:
Speak of the devil!
Backtesting is a key part of the argument in "Variable Annuities: From Controversial to Mainstream Using a Two-Bucket Strategy, Part 1," Journal of Financial Planning (August 2007).

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Tuesday, September 04, 2007

Top three challenges for RIAs, according to Moss Adams

According to the press release for "Uncharted Waters: Navigating theForces Shaping the Advisory Industry" from Moss Adams and Pershing Advisor Solutions, the top three challenges confronting registered investment advisors are:
  • Increased competition from the dramatic growth of the RIA market
  • Need to provide advice to increasingly sophisticated clients
  • Competition among RIAs to recruit top talent
According to the press release, you can obtain a copy of the executive summary and full report by e-mailing Pershing Advisor Solutions at

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