Jay Jacobs is the head of research and strategy at Global X, an innovative thematic exchange-traded funds provider. In his role, Jacobs leads the firm’s research efforts, uncovering potential growth opportunities and helping instigate the development of exciting new products.
In this episode of Opto Sessions, Jacobs considers some of the key factors that can help an investor bag better returns, such as the importance of keeping an eye on the time.
Listen to the interview:
What is the top mistake investors make?
Being too short term. A lot of people think that they can outsmart the markets, that they can take quick wins and that that can compound over time. The reality is, the markets tend to be very efficient and challenging to compete in. Even the most sophisticated institutional investors have a challenge to compete in a short timeframe. I think the biggest mistake people make is being too focused on the day-to-day instead of looking at the long term.
“I think the biggest mistake people make is being too focused on the day-to-day instead of looking at the long term”
Where do you go for investment or economic insights?
We read the major ones of course — the Financial Times, Bloomberg, the Economist. But what I really love, on the thematic side, is some of these more specialised publishers that just don’t get as much attention: Benchmark Mineral Intelligence do a lot of great research on lithium; The Robot Report; the Consumer Technology Association puts out a lot of great studies on consumer electronics. We like digging into some of the more kind of industry-specific publications beyond the major ones.
What is the most memorable moment from your career to date?
One that sticks out to me puts the global in Global X. We had a meeting in Bangkok with a few investors, and the city is known for having bad traffic. We were running late, it's 100 degrees out, [and] myself and my boss are in suits. We realised that the only way we were going to make it to our meeting in time was to hire a tuk-tuk — basically a motorcycle with a covered rickshaw on the back. [We were] weaving in and out of Bangkok traffic in the 100-degree weather, and I had kind of an out of body experience and thought, ‘wow, we’ve come a long way as a firm and truly have entered the global stage here’.
What top tip would you give your younger self?
I would encourage any young financial professionals — and it sounds simple — to say yes to any opportunity that comes to them. People sometimes worry about whether they have the tools or have the knowledge to be able to take on a new challenge in or outside of work. The reality is when you say yes to something, you’re betting on yourself that you’re going to be able to figure it out and develop that expertise. Nobody’s an expert in anything until they take that initial step. So, say yes to opportunities and figure it out, and you’ll be very well rewarded over the course of your career.
“Nobody’s an expert in anything until they take that initial step. So, say yes to opportunities and figure it out, and you’ll be very well rewarded over the course of your career”
What is an investor’s best source of alpha?
Well, similar to the first question, the greatest source of alpha is having a long-term time horizon. Now, that’s not technically the definition of alpha, but you are much better off sticking in something for the long run and watching that compounding growth over many, many years. If you really want to think about alpha, develop patience and treat your body well so that you can have a long and healthy life, and compound those returns not for five years or 10 years, but over 20, 30, 40, 50 years. That’s going to be an incredible source of returns.
To hear more from Jay Jacobs, including how he and his team develop ETFs at Global X, listen to the full Opto Sessions podcast below.
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