Somehow my last blog post led me to finding this book with a very similar title! Released in January 2025 by Mark Haefele, Global CIO of UBS, this book could not have come at a better time.
UBS calls it “a playbook for growing and protecting your wealth”. Now, I found it rather strange that a bank’s website would so heavily push a book written by one of their key executives. But it totally makes business sense. Apparently, financially successful people are avid readers; Tom Corley’s book on self-made millionaires “Change your Habits, Change your Life” says that 88% of rich people “devote thirty minutes or more each day to self-education or self-improvement reading” and that “most did not read for entertainment”.
This book shares some of the wealth management ideas and strategies employed at UBS under the helm of Mark Haefele. If readers (with money) like what Mark presents, there’s a chance UBS will be able to get their business.
For the rest of us who are not willing to hand over the AUM required for private banking, or who balk at paying 2.5% in annual management fees, we can read the book instead! I’ll share some of my key take-home messages, but I recommend that you get your own copy as there’s a lot of good content that I won’t be able to include in a summary. Here’s what Mark recommends:
1. Follow the Big Money
Government monetary policy and incentives can cause big moves in the stock market. Follow the news and bet on themes/sectors (rather than individual stocks) that are being favoured by governments.
2. Allocate Assets
The best returns come from asset allocation instead of stock picking. Most of us are not going to be rockstar stock traders, but we will make decent returns with the right asset allocation (and not have to lose sleep trading the market). Don’t think of buying stocks, but think of it as allocating assets.
Rebalancing based on asset allocation naturally allows us to buy low, sell high.
3. Diversify
Diversify across different asset classes, sectors and geographies. A diversified portfolio can withstand market shocks and ensure the best return with the lowest amount of risk.
4. Understand our money issues
Our family and childhood shape the way we deal with money. Understanding and overcoming our feelings of scarcity (expressed as fear and greed) is necessary to be better at managing our wealth. Mastering your emotions and money issues will improve your investment returns.
5. Why are you investing?
Many of us make the mistake of accumulating money for the sake of accumulating. To be really “wealthy” is to use money to help us achieve a fulfilling life. Knowing your objectives and priorities in life will help you develop the ideal asset allocation to support what you’re trying to achieve.
UBS has a 3-bucket system (called the UBS Wealth Way) to help us think rationally about our money:
Liquidity bucket – near-term spending of 3-5 years to outlast global recessions, avoiding panic-selling and selling for living expenses [held as cash, deposits, bond ladders]
Longevity bucket – money for other life goals 5 years from now and retirement [mostly made up of equities, with a smaller portion in cash, fixed income, hedge funds, private equity, real estate etc.]
Legacy bucket – wealth post-death to help others [very long-term investment so we can go for higher-risk (higher return), low liquidity investments: equities, private equity, hedge funds, real estate]
6. It’s possible to have your cake and eat it
Many think that investing and philanthropy are 2 very different things. One makes money and the other spends it! Mark introduces some of the investment ideas in UBS that successfully marries investing and doing good (he calls it impact investing). Apart from an immuno-oncology fund that UBS created, Mark touched upon products such as DDBB (iShares Development Bank Bonds UCITS ETF) which pays decent yields and has some element of helping the world. I’m sure more impact investing opportunities like this will start to appear in the near future.
Impact of this book on my investing strategy
This book felt very relevant to current market conditions and I devoured it in one day until way past midnight as I did not want to put off learning what Mark had to share. After reading the book, I can say I feel more confident about my DIY approach to wealth management.
His emphasis on asset allocation is pretty much in line with how I’ve been recently thinking. For example, since developing our Investment Plan last year, I’ve moved away from the idea of buying stocks and instead call it deploying funds to meet our target asset allocation. This makes it slightly easier to make larger ETF purchases than I’m used to, and I don’t feel too nervous about the volatility affecting our net worth.
I was once told that diversification = diworsification. Mark and UBS clearly do not subscribe to this theory as capital preservation is just as important as capital growth and diversification can protect your capital when shit hits the fan. I definitely need to drill down a bit deeper into asset classes, sector and geography to ensure sufficient diversification.
It was also good to learn about the 3-bucket system at UBS. I used to wonder if my 28% cash target allocation was way too generous since online articles generally recommend a measly 6 months of cash for emergency (but I am not used to that little cash on hand!). This 28% is meant to cover a minimum of 2 years’ worth of expenses and mortgage payments, but in reality I would say it is sufficient for at least 4 years. This actually falls perfectly in line with UBS’ Liquidity bucket, so I’m pretty happy with my plan and will continue to stick to it.
I now need to work out our Longevity and Legacy buckets to convince ourselves to invest a bit more aggressively (I’m still too slow at deploying when it comes to equities!).
I’m also still trying to manage my emotions investing. While I have my asset allocation in place, I also still try to implement what I learnt from a trading course to optimally buy based on support and resistance. I then feel regret over missed opportunities – if markets recovered fast, I didn’t deploy enough; if markets dipped further, I deployed too early! In the long run, these attempts to buy the dip probably will not have such a big impact on our final portfolio and I really should not spend so much time and energy watching and trying to optimize my entry.
Mark also spoke about scarcity mindset causing fear and greed in investors. I would like to think that I don’t have a lot of fear or greed when it comes to investing. I’m pretty content to get 6-7% overall medium-risk returns and don’t feel the need to maximize for crazy cryptocurrency/ponzi-scheme-like returns because we already have enough. I think having a huge cash buffer (liquidity bucket) actually contributes to this feeling of having enough! When I used to empty out my cash accounts for investment property downpayments, I usually felt quite broke for a while!
All in all, reading this book didn’t turn my investing life upside down, but it certainly has given me conviction in my own strategy and that in turn will give me confidence to stick to my investment plan (or even fine-tune it for the better).
What I didn’t like about the book
I have to say I mostly enjoyed the book and found it really helpful. My complaints might seem very trivial but it’s also a small reminder to myself that all writing needs to be taken with a small pinch of salt.
For instance, in one of the later chapters, they shared stories of their clients and their impact projects, one of which was a wellness centre.
“Tulah is a wellness center that Faizal has built in Southern India, a $100 million modernist mirage emerging from Kerala’s bird-filled jungle overlooking the Arabian Sea. The complex is a twenty-first-century take on midcentury architecture, a series of cool-looking domes and waterways and Babylonian-style hanging gardens that blend in with the surrounding natural beauty. ”
Wow, it sounded like my dream project! (I’ve always dreamt of owning a luxury boutique hotel/retreat centre with vast forest and sea views.) I googled this wellness centre and found nothing midcentury, no hanging gardens and certainly no bird-filled jungle or sea. I suppose the jungle and sea views are somewhere in the 30 acres, but the google images were, sorry to say, incredibly bland and uninspiring. It actually left me wondering what else was exaggerated in this book!
A second point that I felt was a little old-school was the concept of leaving wealth to others only after one’s death. Having read Die With Zero, I’m more convinced that wealth should be distributed as early as possible as it has greater impact now than in the future.
If you pass away wealthy at 85, your 60-year-old child is at the stage where he might not really need that inheritance (unless it was worked into his retirement plans to begin with, which would be difficult as he wouldn’t know when you would actually kick the bucket). Instead, he would probably have appreciated it a whole lot more at 35 or 40 as there are much more challenging life circumstances at this age (e.g. raising a family, buying a house etc).
If you choose to give away your wealth to charities, it would be a lot more fulfilling seeing it put to use while you’re alive than only handing it over when you’re gone (if you did not update your will along the way, those charities might even no longer exist!)
The bottom line (as this book puts it!)
Turbulent markets come and go, but a strong wealth management strategy will help your money survive or even thrive! Start working on your investment plan with asset allocation first and foremost.
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