Practical Applications of Thriving Amid the Ravages of Creative Destruction in the Investment Management Industry

Abstract

In Thriving Amid the Ravages of Creative Destruction in the Investment Management Industry, from the June 2022 30th anniversary special issue of The Journal of Investing, author Donald Peters (of T. Rowe Price) shares insights from his 35-year career in the field. He emphasizes the competitive value of embracing non-mainstream approaches, such as working with a longer time horizon while most investment managers are focused on the short term. Other examples include reading academic investment literature (to keep up with the latest thinking), reading proxy statements (to learn about CEOs’ financial stake in their companies), focusing on after-tax returns, and dissuading retail investors from engaging in speculation. Peters asserts that investment management is a highly rewarding career that is all about adding value and helping clients reach their financial goals. Initial success comes to those who are intelligent, adapt to changing markets, and work well with a team. They must have intellectual curiosity, a passion for investing, and outside friends and interests that give them different perspectives. They must think like detectives when analyzing stocks, while being savvy enough to sort out facts from sometimes biased company communications. Managers also can help their communities and themselves by joining the boards of nonprofits, where they gain valuable knowledge about institutional investing and consulting.