MFG Insider- March 2017

What Can We Learn From Snapchat?

Alexander Mack

(Mark Lennihan / AP)

“If only I had invested $15,000”, my grandma tells me. She has just read an article about a California high school which had invested $15,000 into Snapchat in its early days and on March 2nd cashed in for a cool $24 million. How did so many investors miss on Snapchat? How come more people didn’t notice what was going on at Snap Inc. headquarters? How did any of this happen?

 

Snapchat has never let the thoughts or opinions of venture capitalists, corporations, or their social media counterparts affect their decisions or direction. While it may sound like a cliché, they stick to their guns. Many thought Snapchat was the frivolous younger brother of Twitter, Instagram, and Facebook – an app for sending photos you wanted seen but not saved.  But in Venice Beach, California, Snapchat was not worrying about perception.  They were trying to perceive what the future looked like. Snapchat knew that as more and more millennials entered the market, the need for digital media consumption was only going to increase. They developed platforms for the giants of news and media to broadcast to the largest human generation in history. Today on Snapchat, you can find ESPN, The New York Times, The Washington Post, CNN, MTV, WSJ, and many more media outlets all conforming to Snapchat’s function of vertical video.

 

The key to success for many companies is finding their niche and then maximizing that focus. How did a small social media app force the “big boys” to conform to their platform? By continuing to change and improve their product and their service without being asked or influenced to do so. By making changes even when they were not requested. Winston Churchill said “To improve is to change; to be perfect is to change often.” Snapchat could have easily sat back in their photo sharing space and found success. Instead they are now publicly traded on the New York Stock Exchange.

 

What can we learn from Snapchat? You always have control of what YOU do, but you limit yourself when you let others decide your ability.

Advisors Corner

Micki Naal

Recently, the Wall Street Journal published an article featuring Dimensional Fund Advisors. DFA is the sixth largest mutual fund manager – moving up from eighth a year ago. DFA is adding an impressive two billion dollars in net assets a month. In 2016, only DFA and Vanguard have added assets, while monies are flowing out of other firms. Ahead of this trend, Mack’s investment portfolios, offered by M Financial, are comprised of mutual funds from these two winning firms.

Why use DFA? First, DFA is founded and run by the pioneers of modern finance from the University of Chicago and Dartmouth. DFA’s disciplined and academic approach to management keep costs low while consistently beating the benchmarks. Utilizing this efficiency, M investment portfolios have a net expense of only .3% while other firms charge considerably more. Second, until recently, DFA was only available to large institutional clients. Now, only certain firms that share and understand DFA’s philosophies, are able to offer DFA to individuals. Again, Mack Financial is one of those firms.

I hope you read this informative WSJ article and do your research on DFA.  As a financial advisor, I chose to work at Mack Financial because I believe in the philosophy of not overpaying for investment management.  Chasing high returns by trying to guess “the next best thing” is for the overpaid hedge fund managers – that don’t even achieve the benchmarks. I encourage you to be smart – every basis point saved translates into big bucks in your future.

WSJ ARTICLE +

Micki Naal

Financial Advisor

Chicago/Joliet Office

MICKI NAAL +

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