Archive for June 2026
A client of mine recently asked me a great question: “What value did you bring to our engagement?” To answer this, we went back to look at the net profit of his account since 2019.
2019: $151k
2020: $197k
2021: $286k
2022: -$323k
2023: $304k
2024: $232k
2025: $311k
2026YTD: $129k
Then he asked an even better question: “That doesn’t mean you added substantial value, does it? If I had just invested the money in the S&P 500, I could have made the same amount or even more.”
So I further clarified …
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During the Oxford Reunion Week, I had many interesting conversations with classmates who were attending the strategy class. I took the same class five years ago, and today I would like to share my biggest takeaway from it – reductive strategy.
What is Reductive Strategy?
When it comes to strategy, most businesses ask, “What more can we do?” Professor Whittington suggested that we ask a different question instead: ”What else can we stop doing?” This question forms the foundation of reductive strategy.
Take my own line of business for example. Most financial advisory firms try to be all things to all people. Some firms even offer to walk clients’ dogs and to be their golf partners. They believe this makes them more competitive. Drawing from the insight of reductive strategy, I don’t do any of those that is 1) not my core competency, 2) not what my clients come to me for. This strategy has helped me build a simple but elegant practice.
The Investment Scientist 