The good guys won. The bad guys are all dead, and the good guys win.

Simonoff: People say that those advisors who are stock market-focused are the ones who are suffering, while those who are client-focused are prospering. Is that analysis reasonable from what you've observed in the past?

Murray: It's beyond reasonable. It's a truism. It's not news. If your portfolio is essentially a speculation on the trend of the market, then A: You were never an investor, you were a speculator, and B: You're dead. But not if your portfolio was and is a reflection of your long-term financial goals being pursued in a patient, long-term realistic way. Again, any approach to investing which does not assume a 30% hit every five years or so isn't reasonable. So if that's in the equation and if you had a long-term goal-oriented reasonable approach to investing, you're somewhere between stoic and deliriously happy at this point. You're stoic if you don't have any more money to put in. And you're in ecstasy if you do.

Simonoff: You've watched this business evolve for 34 years roughly. What are some of the most significant changes that you've witnessed?

Murray: I think it's remarkable how few really revolutionary changes I've seen. Unfixing commissions was the first. Unfixing commissions was one of maybe four revolutionary events I've seen in the business. The sudden and inexplicable shift of the investing public from individual stocks and bonds to mutual funds and later to other portfolio/package-type products around 1990 was the second. And the death of Glass-Steagall is the third.

And there was one more megashift. The fourth really revolutionary change was the migration of retail financial advice from a commission basis to a fee basis.

Simonoff: Some advisors and many investors started to favor individual stocks over funds in recent years.

Murray: You're saying in the late '90s people went back out to individual stocks. That was a cyclical phenomenon. Three things will take you out of mutual funds into individual stocks-three things working together. And when all those three things start running together, then you get epic, historic tops. And the three things are overconfidence, underdiversification and speculation. But I would say to you that those were cyclical rather than secular phenomena of the late '90s. At least I hope they were.

Simonoff: Do you think that that can explain the difference between those who are getting through this bear market relatively unscathed and those who are in severe pain?

Murray: Yes, but all that does is amplify my previous answer, which was that people who stayed diversified are mostly okay and people who didn't aren't.

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