Mitch Tuchman: I had two events in my life in the ‘90s that really shaped the way I invest. The first was when my first son Jack was born in late 1996, and about a year later, we learned that he was severely disabled. For his entire life, someone would have to watch him, and that’s very expensive, and I thought, oh my God, I’m going to have to fund someone watching this kid, not only through my life, but 50 years after I’m six feet under.
Second, I had been an entrepreneur for many years and we sold a company shortly thereafter. Here I was with a disabled child, huge financial obligations, among other obligations and commitments – and this was the potential for lifetime financial security if I didn’t screw things up.
It was during the ‘dot com’ boom, when more people were doing a lot of wildly stupid things with money, and I wanted to be absolutely certain that I didn’t make the same mistakes. So I began seeking the best investment advice that I could, and it was investment advice that was not just for my own retirement, but also for my son’s life 50 years after my retirement.
That led me to consider how foundations and endowments think about investing, for perpetuity, and that influenced how I think about investing for our clients. It’s a very different way than the world tends to think about retirement investing, because you think in perpetuity as opposed to an end point, you think about how assets need to continue growing as opposed to diminishing over time. It makes you think about not to lose, it makes you think how do I not make a mistake, how do I not screw this up. And if I just play not to lose, what happens?
Very quickly you learn that if you play not to lose in investing, you can actually do better than 90% of people because most people’s returns suffer from the mistakes caused by greed and overextending themselves and overconfidence. So it’s an irony, it’s a paradox, because most people out there trying to beat the market, those of us who simply will settle for the market returns and ride with the market tend to do better than 90% of the other people.