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Simplicity movement

In the bygone era, elaborate designs were once the norm. Now they have evolved to be simpler. The desire for minimalism can be found in many other industries today, including investing.

Take three of today’s popular trends: Apple* products, Zen gardens and modern art. In 1977, Apple’s first marketing brochure came out, declaring that simplicity is the “ultimate sophistication.”

Zen gardens and modern art share that same philosophy. This is obvious to the viewer, especially when compared with the more intricate gardens and paintings of earlier centuries. The works of abstract expressionist painter Mark Rothko, for instance, are colorful squares on a large canvas. They are a stark contrast to the more detailed work of the Italian Renaissance artists.

It isn’t only art where simplicity has survived over the years. The Shakers were an American religious sect first established in 1750s England that focused on living simply in celibate mixed communities. They are known formally as the United Society of Believers in Christ’s Second Appearing.

The Shakers are a much smaller group today at three members, living in a single house in New Gloucester, Maine. Their practice of celibacy makes it difficult to find members to join and impossible to produce new members through procreation.

But the style of their furniture lives on. Such chairs, tables and beds are accordingly plain, with no carvings or other unnecessary luxuries. The style became so popular that it eventually proved to be a major source of income for the Shakers.

So how has investing evolved toward simplicity? As the global markets have grown, investing has only gotten more complicated instead of the opposite. There are more risks to consider than ever before, and with that, greater uncertainty.

What’s changed is how investment managers are talking about the markets and investing.

What’s changed is how investment managers are talking about the markets and investing.

The investment firms who are trying to impress with impenetrable jargon are likely less sure of themselves than they seem. We believe that the less self-assured might be tempted to show off to others by making what they do seem as complex and intricate as possible. (This sort of behavior probably is not limited to the investment industry and may also exist in others.)

The problem with this is that it confuses the person who is trying to understand you. If the goal is to boost communication between investment managers and their investors, then jargon is of little use and little help. Transparency is important in today’s environment, and jargon puts a dampener on achieving that.

There is much that great art and design can teach all of us about simplicity. Among the most famous gardens in the world are the minimalist spaces found in the great Japanese Zen temples, including the rock garden in Ryouanji, Kyoto. We believe design rarely comes much simpler than that. After all, that is the point of the Zen influence.

By examining pared down works of art, we in the asset management industry can learn a thing or two about paring down the way we communicate the markets to investors. While the markets themselves may be complicated, the communication doesn’t have to be.

Simple design and simple text ultimately pays off. The success of Apple is just one example.

Important Information

*Companies mentioned for illustrative purposes only and should not be taken as a recommendation to buy or sell any security. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list.

© Stapleton Collection/Corbis

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