It’s two weeks after the end of the quarter – do you have your commentary finished?
Many investment professionals who are responsible for writing a quarterly update for clients dread the thought each time around and drag their feet. It’s not easy to write clear and effective commentaries; often they feel formulaic, with the same structure and the same themes being used over and over.
How can you do better?
For ideas, I participated in a webinar put on by Susan Weiner, “How to Write Investment Commentary People Will Read.” Weiner is a chartered financial analyst who provides writing training and bespoke services, and who has presented at many CFA society events. (More information about her can be found on her website.)
To write commentary that is compelling for your readers, know your audience – and know that they wonder: WIIFM. That is, “What’s in it for me?” Making your ideas relevant to their personal interests is critical. “What keeps them awake at night?” asked Weiner. Start there.
A client-focused commentary includes the words “you” and “your” and a connection between the events of the quarter and their own situation, rather than a dry and distant recitation of facts.
“Say something provocative” was one of Weiner’s suggestions, although it’s not always easy to find a topic that is of great interest that hasn’t already been thoroughly covered in today’s 24/7 world of communication. For example, most of the participants felt that interest-rate risk in the bond market and the crisis in Greece were topics that would fit, but it’s not as if there’s been a shortage of coverage regarding them.
Weiner offered some ideas: look for differences of opinion (in the market or even within your firm) that can be explored, pass along ideas from materials you read that your clients likely haven’t seen, and directly address questions that you have heard from your clients about the issues of the day.
How to structure a commentary is highly dependent on where it is used. Many hedge funds, for example, produce a multi-page quarterly letter that is somewhat flexible in format. In other cases, managers only have a few brief paragraphs to get their ideas across – and they have to do so within a tightly-constrained organizational template.
No matter the palette at your disposal, it’s imperative that you structure your writing in a way that helps the reader to comprehend your ideas. Weiner suggested that you organize your thoughts before you ever start writing, and she advocated for the use of mind mapping to help you to do so. She stressed the need for strong topic sentences in each paragraph; one of the exercises in the webinar involved crossing out everything else in a piece and seeing how well the essence of it was conveyed by the topic sentences alone. Layout options can also help – bullet points, sidebars, headlines, and exhibits – if you have the flexibility to use them.
For those of us whose writing gets needlessly complex, the most important message of the webinar was, “Simplify, simplify, simplify.” Weiner urged participants to use strong verbs, to kill needless adverbs, and to be brief and precise. If you want something to be readable, use shorter words, less complex sentences, and aim for paragraphs of around 42 words and sentences of 14.
It’s better to have your writing come in at the tenth-grade level (in terms of comprehension) rather than that of a Ph.D. You might not feel as smart, but your writing will be more effective. (I took Weiner up on her suggestion to test some of my own, using the Hemingway App. It’s a good way to see whether your writing has become hard to read.)
As investment professionals, we also tend to use jargon too much. That’s how we talk amongst ourselves, and it carries over into our writing (and our presentations). Instead, Weiner said that we should follow the lead of Warren Buffett, who wants his annual reports to be in plain English, “understandable by his sisters.” In doing so, he has made them accessible to professionals in a way that others don’t.
That should be the goal. As Weiner said, focus on making your writing “compelling, clear, and concise.” If you do, it will stand out.