My Trading Strategies and Social Media Activity Set Me Apart

By Paul Schatz
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What's Working Now: Running 11 different investment models keeps this advisor engaged and excited about his business. And he's using social media to attract prospects, too.
Editor's note: In our Advisor Radio feature What's Working Now, Horsesmouth members tell us about recent successes they have had running and growing their businesses. In this edition, we hear from advisor Paul Schatz, who tells how proprietary investment strategies and social media are boosting his business. You can hear the full Advisor Radio interview with Schatz by clicking the audio file just below.

Following is an edited transcript of Schatz's interview.

Quick overview

Advisor: Paul Schatz
Woodbridge, CT.

Years in business: 26

Firm: President, Heritage Capital

AUM: $52 million

What's working now: Developing some proprietary in-house investment strategies and using social media and blogging to help promote and grow business

What sets you apart?

When people meet me, they ask, "Why you over anybody else?" or "What sets you apart?"

What I sell to people as far as money management goes is our alpha—our early, unique selling proposition for your portfolio is [that] our models are all independent. That's number one.

The models are across almost all the asset classes. And I think the big mistake people make is just having diversification of equities and fixed income—[that] doesn't do a whole lot of good in many markets. I believe you have to diversify it not only in asset class but in strategies as well, because you can have three different equity strategies that have three very different return profiles and very different risk profiles.

One may target emerging markets on a long-term time horizon. One may target the S&P on a short-time horizon. And one may be a multi-asset, multi-strategy portfolio. I think there are a lot of different ways to skin a cat, and certainly to make money in the market. And I think the mistake people make is they don't broaden their horizons enough.

At the beginning, I had a couple models that I had developed. Now we have 11, with more on the horizon. People ask, "How do you run 11?" First and foremost, they're all quantitative in nature. So they all run on computers. They run overnight or I come in in the morning and I run them. If there's any kind of execution to do, I know about it as I come in and run my models to see what's going on.

I love developing models. To me it's the ultimate challenge. It's the greatest thrill when something works over many market environments. We run all our models in-house, which helps set us apart.

Getting online

I've also been able to differentiate myself in 2013 through a new social media strategy. It started with the creation of my blog. I publish on there one to four times a week, and it's a good way for me to organize my thoughts.

I wasn't getting a lot of traction at first. People didn't know I was publishing there. A young woman suggested, "You should start tweeting when you do blog posts." My first question to her was, "What is tweeting?" From there this woman helped me create my Twitter account and my corporate Facebook account.

I started posting when I had new blog posts up. And that morphed into three-times-a-week posts on Twitter and on Facebook. Then I started posting pretty much daily on Twitter and on Facebook. So now I've got Twitter, Facebook, and my blog, which I post regularly. Mostly short and concise things about the markets, geopolitics, the Fed, etc., but it's certainly generated a tremendous number of prospects on my blog and on my regular newsletter.

Folks have actually started becoming clients. It's actually paying off in hard, cold dollars.

One was an old camp friend from the 1970s who found me on Facebook and then started following me and then asked me what I did. We talked further and an account rolled in.

Learning a new process

The whole process has been really eye-opening. It takes a lot of time with social media, because people are not trusting when they don't sit in front of you and shake your hand and see your facial reactions.

What will be really interesting is to see the length of engagement. They're getting to know you in a different way, and it will be interesting to see how sticky these clients are over time.

Social media is not a holy grail. You've got to put it in your arsenal among other marketing tools. And you've got to be committed to it. You can't tweet five times one week and then not again for a month, because people lose interest. It's a much tougher thing. You're competing so hard for eyeballs.

What's working for you?

So what's the one thing you (or your team) have been doing recently that is making a big difference in how you're running your business and succeeding. Let us know in the comments below. Thanks.

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