What if the biggest threat to your financial future isn't market volatility at all? In this Fix It Friday episode of the Crazy Wealthy Podcast, Jonathan Blau explores the two distinct roads investors can take in wealth management, one built on conventional wisdom and another rooted in behavioral investment counseling. He challenges common assumptions about risk, portfolio construction, market predictions, and the role of bonds, while revealing why purchasing power—not portfolio fluctuations—should be the true measure of financial success. This thought-provoking conversation helps investors rethink what it really means to protect and grow wealth over the long term.

What You’ll Learn:

The two competing approaches to wealth management

Why traditional investment advice often becomes commoditized

The difference between volatility and true investment risk

Why purchasing power matters more than account balances

Want to make smarter financial decisions grounded in clarity and confidence? Subscribe and share the Crazy Wealthy Podcast. To learn more about Fusion Family Wealth’s evidence-based investment strategies, visit www.fusionfamilywealth.com and request our current disclosure brochure.

Key Timestamps:

1:30 – Why most financial advice feels interchangeable

03:40 – Where behavioral investing differs from conventional wealth management

05:20 – The flaws in market timing, forecasting, and prediction

07:15 – The two roads in wealth management: comfort vs. success

10:10 – Essentials versus refinements in portfolio construction

Key Takeaways:

Financial planning should begin with clearly defined goals, not investment products.

Past investment performance is not a reliable predictor of future results.

Conventional portfolio strategies often focus too heavily on minimizing volatility.

Inflation poses a greater long-term threat to wealth than temporary market declines.

Purchasing power is the true measure of financial success.

👤 About the Host:

Jonathan Blau is the President and CEO of Fusion Family Wealth, a fiduciary wealth management firm he founded in 2013 to help families achieve clarity, confidence, and purpose with their money. With a deep focus on behavioral finance, Jonathan teaches investors how to recognize emotional biases and make evidence-based decisions that support long-term success. A sought-after speaker in wealth management, Jonathan previously held senior roles in tax and estate planning at Arthur Andersen. He holds a BS in Finance, an MS in Taxation, and an MBA in Accounting. Based on Long Island, Jonathan is active in the local business community, supports organizations such as the Middle Market Alliance and Sunrise Day Camp, and enjoys boating with his family.

LinkedIn – Jonathan Blau

Fusion Family Wealth Website

Crazy Wealthy Podcast

A copy of Fusion's current written disclosure brochure discussing our advisory [00:00:15] services and fees is available upon request or at www.fusionfamilywealth.com.

And what I'm gonna talk about is what I [00:00:40] see as the two roads in wealth management, one road that actually drives [00:00:45] success and one road that actually derails it. So let's take a look at that and get [00:00:50] more, uh, deeply into it[00:00:55]

[00:01:25] And now, here's your host

A- and that's not surprising, because much of the industry [00:01:50] is essentially producing the same movie. They're just doing it under [00:01:55] different directors, different branding, different slide decks, different personalities [00:02:00] talking about it and presenting it, but underneath it all, it's the same basic playbook. [00:02:05] So today, I wanna walk you through the difference between that conventional wisdom approach, as I refer to it, [00:02:10] and the behavioral investment and counseling approach that we use here at Fusion [00:02:15] Family Wealth.

Like most [00:02:35] thoughtful advisors, we believe deeply in planning. Real wealth management [00:02:40] should begin by helping clients define their objectives. What do you want your money to do? [00:02:45] Who's the money for? What's the money for? And when will the money be needed? are the three [00:02:50] questions I always ask at the beginning of every planning meeting.

And only after that process of defining [00:03:15] objectives and building a plan do we select investments to fund the [00:03:20] plan. That's what I would call good planning on anyone's part, a behavioral counselor [00:03:25] or a traditional, conventional-based advisor. And I wanna be clear, we deeply believe in the [00:03:30] planning process, so a carefully thought-out, creative, customized plan [00:03:35] should be the foundation of everything we do as advisors in our industry.

It [00:04:00] begins with the third step, which by the way, most advisors and investors often [00:04:05] think is the only step. What are the investments gonna be? How'd you do for the last five years? All [00:04:10] those things that really are irrelevant, because how someone did for their clients, meaning the [00:04:15] investments they chose, did for the last five years, is a very narrow question.

Past performance is never an indication of future performance [00:04:40] at all. That may sound cliché, but it's true. There is no statistical evidence [00:04:45] for the persistence of performance. And so it all begins the difference with how the [00:04:50] investments, again, are chosen by the investment counselor, behavioral investment counselor, and by the [00:04:55] traditionalist, and what those investments are actually designed to protect [00:05:00] against because the behavioral investment counselor designs their investment [00:05:05] portfolios to protect against something vastly different than what the industry conventional [00:05:10] wisdom advisory protocol designs their portfolios to protect against.

We can identify consistently who, who the best managers of [00:05:40] stock portfolios are going to be prospectively, and we can consistently give you [00:05:45] a timing advantage, letting you know when, based on all of our forecasts, to get in and out of the [00:05:50] markets and in and out of different sectors. In other words, what I call timing, selection, [00:05:55] and prediction.

They're [00:06:15] all built around one very common and very dangerous assumption, and that [00:06:20] assumption is that risk is defined as volatility, that if your [00:06:25] portfolio moves around less, somehow you're safer from an investment [00:06:30] standpoint. And from that assumption flows the conventional portfolio design. More bonds, [00:06:35] particularly as we get older, less fluctuation, more smoothness, more comfort.[00:06:40]

And this is the point in the [00:07:00] conversation where the paths really diverge. And as Robert Frost wrote, [00:07:05] "Two roads diverged in a wood, and I, I took the [00:07:10] one less traveled by, and that has made all the difference." That's [00:07:15] exactly how I think about wealth management. There are two roads. One's built around minimizing [00:07:20] temporary discomfort, and the other is built around maximizing the probability of [00:07:25] long-term success.

The irony is that over time, this typical conventional industry [00:08:00] approach often produces the very outcome it's meant to prevent, [00:08:05] unnecessary destruction of wealth. Wealth is defined by [00:08:10] purchasing power. Let me say as clearly as possible, volatility is [00:08:15] temporary, inflation is permanent. That's the real risk, [00:08:20] and there's a deeper misunderstanding underneath all of this.

Our culture, though, treats [00:08:45] these currency units like they're a store of value somehow. They aren't. [00:08:50] The only rational definition of money is purchasing power. In other words, what can those [00:08:55] dollars actually buy? Because if I take one million dollars and preserve it [00:09:00] perfectly in bonds or even under a mattress for thirty years, at [00:09:05] long-term inflation, it might take close to three million dollars to buy what that one [00:09:10] million bought at the beginning of the thirty-year period.

He describes this in a way that [00:09:40] really seems to resonate. He says there are two kinds of money. There's wealth, [00:09:45] whose natural function is to grow, particularly relative to inflation. And then there [00:09:50] is money that runs out. And he points out that while most conventional practitioners think [00:09:55] of themselves as wealth managers, they are in effect managing the second [00:10:00] kind.

That [00:10:35] different matters enormously over multi-decade retirements and certainly over [00:10:40] multi-generational plans. Most investors don't need just a little more return. They need a lot more [00:10:45] sevens than threes if they're gonna reach their most cherished fin-financial goal. Then [00:10:50] there are the refinements. A little more or less small cap, a little more or less [00:10:55] international exposure.

So now I want to share, because I don't [00:11:20] want the audience to misinterpret my feeling in meaning that we don't think bonds [00:11:25] fit anywhere. They do. In our view, they just don't fit for the reason the industry says they [00:11:30] fit, which is to control volatility. We use bonds to control the timing [00:11:35] of necessary withdrawals, particularly as our clients and investors get into [00:11:40] retirement, and that's a very different purpose.

We do that so if the investor's spending [00:12:05] needs in retirement happens to coincide with a bear market, which is defined as [00:12:10] a twenty percent decline from a recent high. Now the... And mind you, the average bear market, [00:12:15] that's a definitional bear market. The average bear market has been down thirty-three percent.

Not volatility, which by the way, [00:12:50] I don't think of as any threat, but against the permanent destruction of our wealth due to [00:12:55] inflation that compounds relentlessly at about three to four percent annually over time. [00:13:00] And that's very different from telling an investor to hold thirty or forty percent in bonds [00:13:05] largely to reduce temporary fluctuations.

That's the question [00:13:35] worth asking, because when a process depends on prediction, selection, and optimization, [00:13:40] it becomes commoditized. But when a process is built on clarity, discipline, and [00:13:45] behavior, it becomes durable, scalable, and most importantly, [00:13:50] valuable. So in the end, the two roads in wealth management don't just feel different, [00:13:55] they lead to very different destinations.

So that's today's Fix It Friday, and appreciate you [00:14:25] tuning in. Stay crazy wealthy, and you can catch us on our website, [00:14:30] fusionfamilywealth.com, crazywealthypodcast.com, and all of your favorite [00:14:35] podcast venues

Thank you for

The previous podcast by [00:15:00] Fusion Family Wealth, LLC, Fusion, was intended for general information purposes only. No portion of the podcast serves as the receipt of or [00:15:05] as a substitute for personalized investment advice from Fusion or any other investment professional of your choosing. Different types of investments involve [00:15:10] varying degrees of risk, and it should not be assumed that future performance of any specific investment or investment strategy or any non-investment related or planning [00:15:15] services, discussion, or content will be profitable, be suitable for your portfolio or individual situation.

No portion of the video content should be construed by a client or prospective client as a guarantee that he or she will experience [00:15:35] a certain level of results if Fusion is engaged or continues to be engaged to provide investment advisory services. A copy of Fusion's current [00:15:40] written disclosure brochure discussing our advisory services and fees is available upon request or at [00:15:45] www.fusionfamilywealth.com.