Managing an impactful portfolio with Richard Excell, CFA, CMT, MBA

Following what could be considered the worst January of the financial market since 2009, many investors are battling loss aversion and other investments biases. To help break down the biggest mistakes that investors tend to make following a hard season, as well as what they should be doing instead, in this episode of The Yield, Peter Kerr, CFA, sits down with Richard Excell, instructor of finance at the University of Illinois Gies College of Business. Together they take a look at where investors might want to consider taking an appropriate level of risk in today’s markets.

Key Takeaways:

[5:26] Loss aversion and other investment biases.

[7:45] The importance of discipline in any approach to investments.

[31:50] The Fed’s position on balancing all inflation factors.

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Loss aversion happens when people begin to derive less enjoyment from investment gains than they experience pain from losses. Too many investors hang onto bad investments in the hopes that they will bounce back, but Richard warns that the worst thing that an investor can do is hold onto a trade for so long that it becomes an investment. As he puts it, there are a lot of ways to make money in the world, but the best way is by staying true to who you are as an investor.

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Even beginner investors have more access to information than they might think they do. Richard encourages listeners to identify their stock-picking strengths and to lean into them. He also reveals the way that he views current trends in the market, which can ultimately be summed up as the economy drives earnings and earnings drive stocks and stocks are the riskiest asset class that most of us follow.

He offers a myriad of questions that investors need to ask in the wake of a historically low month in the midst of a historically high season. It’s also important to remember the role of supply and demand in current market trends. Richard shares several places that investors can look to gain a better understanding of those trends, and lists three potential reasons for such swings in the catalyst of market flows.

Inflation is staring the market down right now, and Richard has insights into not only what is driving inflation, but where investors need to look for the most accurate assessments of how it will affect the market in coming months, including geopolitics, ESG initiatives, and post-pandemic wage expectations. Are the higher prices we’re seeing everywhere here to stay? According to Richard, the answer is yes, that prices are going to continue to adjust both sharply and rapidly, but he also encourages listeners to view both volatility and inflation through the lens of opportunity.

There are key catalysts that will dictate the direction the market heads in the next six to 12 months, and Richard shares the points that he looks at to determine which of those catalysts has the potential for real impact on investment strategies. Between those drivers, the next moves from the Fed, and other political drivers, there are plenty of angles that investors need to consider in the volatile market of 2022.

These are just a few of the many significant factors that play into today’s market. For more information about investment opportunities in any environment, visit

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