In Conversation with Investment Expert Philip Barach
The new CEO of Vista Group, Philip Barach, talks about financial literacy, core values, and shares tidbits for novice investors.
The latest financial crisis induced by the Pandemic unleashed a lack of financial knowledge among people that must be reprimanded from an early age for the sake of the future. With this realization, Philp Barach, a renowned name in the realm of fixed-income and real estate investment, remains at the forefront to create financial awareness. He often appears on the talks shows and podcasts, explaining the most basic financial concepts to promote financial security among the population, along with highlighting the core values necessary for the investment.
Philip Barach, former founding partner and president of DoubleLine Capital, has recently retired from the L.A.-based investment management firm to join Vista Investment Group as CEO and co-managing partner. With over 40 years of industry experience under his belt, Barach served as the Co-Founder and group managing Director of the TCW Mortgage Group. He was also the Senior Vice President of Chief Investments for Sun Life Insurance Company and Principal Fixed Income Officer for the California Public Employees’ Retirement System (CalPERS), the biggest pension plan in the United States. Today, we joined the investment pro in a conversation to expand more on the topic.
Q: What are the basic core values essential for financial literacy and investment?
Philip Barach: I believe honesty, effort, and responsibility are the three core values that every person must learn if they desire to succeed in the world of investment. In fact, financial literacy and certain values should complement each other; only then can one master the investment techniques.
Q: Why do you think financial literacy is necessary for global society today?
Philip Barach: Honestly, it is the most significant thing for the well-being of the population all across the planet. Society overall must partake somehow in promoting financial literacy. Thusly, the financial well-being of families, organizations, and governments will be made more steady, and the effect of crises will be restricted. Only if people were more financially literate globally, the economies would not have collapsed in the midst of the Pandemic, causing massive unemployment.
Q: Do you believe that being better educated can assist investors with being more independent in their investment choices?
Philip Barach: Certainly! It likewise gives them a superior comprehension of how they can deal with their reserve funds and how they can protect their capital. Simultaneously, they are able to judge better which experts they can trust and how they can monitor the management services that these experts give.
Q: What do you think is the first step to begin investing?
Philip Barach: The very first step is to review your needs and goals. In fact, it is well worth taking the time to contemplate what you really want to get from your investments. Alongside this, you should know yourself, your needs, your wants, your goals, and your appetite for risk.
Q: Tell us more about diversification and why it is vital?
Philip Barach: There is a basic rule of investing that to enhance your chances of a better return, you have to be able to take more risks. It takes gut! Yet, there is a way to minimize risks a bit.
What you can do to manage and improve the balance between risk and return is spread your money across different investment types and sectors whose prices do not necessarily move in the same direction — this is what you call diversifying.
It can help you smooth out the returns while still achieving growth and reducing the overall risk in your portfolio.
Q: Would you Like to give any tip to the beginner investors?
Philp Barach: My greatest tip, in fact, a bit of advice is to avoid high-risk products. You must avoid them unless you fully understand their specific risks and are happy to take them on. Only consider higher-risk products once you’ve built up money in low and medium-risk investments. While some investments are actually best avoided overall.