Invest Well, Be Well

Fritz Folts - Timeless Lessons on Managing Risk and Building Resilience

Episode Summary

A podcast for wiser investing and stronger living. Success in the markets and in life requires sound investments — in our portfolios and our personal wellness. A weekly show, Invest Well, Be Well explores the principles of long-term investing, behavioral finance and peak performance with top-performing investment professionals and cross-industry leaders. Hosted by investment executive Rusty Vanneman and seasoned journalist Robyn Murray, each episode offers practical strategies for building wealth and prioritizing well-being, so you can make better decisions, grow your resilience and elevate your life. In this episode, we spoke with DeFred "Fritz" Folts from 3EDGE Asset Management. Fritz is the Founding Partner and Chief Investment Strategist at 3EDGE Asset Management. Fritz has over 25 years of investment and portfolio management experience. Prior to 3EDGE, Fritz served on the investment committees at both Windward and Windhaven Investment Management, Inc. He also served as the Chief Investment Strategist at Windhaven. Fritz began his career at The Boston Company, where he ultimately served as Director of Global Funding for the then newly formed Boston Safe Deposit & Trust Co., (U.K.) Ltd., in London, England. Fritz received his BA from Connecticut College and his MBA from IESE (Instituto Estudios Superiores de la Empresa), in Barcelona, Spain. He is the former Chair of the Board of Trustees at Connecticut College and now serves as Trustee Emeritus. Fritz also served on the investment committee of the Connecticut College endowment fund. He currently serves as the Chair of the Investment Committee for the Concord Museum, which was recently voted as the #1 Small Town Museum in America by USA Today. He also serves on the Investment Committee for the Umbrella Center for the Arts in Concord, MA. Fritz lives in historic Concord, Massachusetts with his wife Cathy.

Episode Notes

Tune in to hear:

In this episode, we discuss Fritz’s work at 3EDGE, three timeless investment principles, the difference between real risk and perceived risk, how diversification in today’s world may be more nuanced than ever and much more.

Learn about 3EDGE and the work that Fritz does there.
At the highest level, what would Fritz say are three investment principles that are timeless?
From Fritz’s vantage point, how does he balance the pursuit of upside versus the protection of downside when building portfolios?
How does Fritz advise investors about the importance of asset allocation versus securities selection? What matters more for longterm outcomes?
How does Fritz educate investors on the differences between real risk and perceived risk?
What’s Fritz’s current high-level read on the market and why does he think it's different from the last 5-10 years?
How does Fritz view diversification in today’s world where a lot of elements of the market seem to rise and fall together? How can investors recognize false diversification?
What routines or practices does Fritz use to maintain his mental clarity and high-quality decision making?
What does Fritz do to emotionally regulate and avoid behavioral traps during difficult market moments?
How does Fritz maintain his work-life balance and how important is this balance for his long-term performance?
If Fritz were mentoring a younger investor, what would he tell them about living well while also building a long-term investing mindset?
On Fritz’s team, what do they do to cultivate a high-performance, disciplined investment culture and how does this reflect in his personal leadership habits?

Quotes

“In our model we have factors we call canaries, the canaries in the coal mine, and we are looking very closely at those to see if any of those should start to signal that the market might start to crack in here. So, one thing that we watch closely are credit spreads, and credit spreads…are actually starting to widen out now, not to the extent that it’s a problem yet, but that would be one of the warning signs. So, go ahead and stay invested in the equity markets but understand there are a lot of potholes out there that you need to be aware of and take defensive action.” - Fritz Folts

“I really feel like that is a good approach to investing, think about yourself as an athlete. You’re not going to go win a gold medal, but you need to keep your body in shape, you need to sleep, you need to get nutrition and take it seriously and it will really help you.” - Fritz Folts

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