The book excerpt that has been published here is from the introduction to the book.
Excerpted with permission from the publishers The New Rules of Investing: Essential Wealth Strategies for Turbulent Times by Mark Haefele and Richard C. Morais, published by Harpercollins Leadership / HarperCollins India
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My name is Mark Haefele, and most likely you haven’t heard of me.
I am the chief investment officer of global wealth management at UBS, the Swiss universal bank headquartered in Zurich. I was an American-born middle-class kid who somehow became a dark-suited Swiss banker advising some of the wealthiest individuals and families in the world. Despite my low visibility, I am told that I am an influencer, albeit one you will never see on TikTok kissing Chihuahuas or lip-syncing Taylor Swift hits.
My credibility, the draw of my global following, stems from the simple fact that from a nondescript office in Zurich, I oversee the investment pro- cess for one of the largest pools of private capital in the world.
That means, in concrete terms, my team and I manage and provide advice to $4 trillion of UBS’s total $5.7 trillion in invested wealth, and, of that pool of assets, we are actively managing client assets of $350 billion. Warren Buffett, arguably the world’s most famous investor, oversees some
$300 billion in portfolio assets at Berkshire Hathaway, which I hope puts what we do in perspective.
Let me give you a taste of what I do. In October 2022, UBS took over the entire five-star hotel the Fontenay in Hamburg, Germany, so that forty highly accomplished billionaire clients, who had flown in from around the world for the event, could have a safe and private place to network with their peers. It was such an important occasion the whole congress was care- fully orchestrated and hosted by the bank’s exceptionally talented wealth
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INTRODUCTION
management president, Iqbal Khan, who also happens to be my boss. Iqbal, an auditor by trade and by then one of the best-connected private bankers in the world, had choreographed every detail and handpicked every guest in the room. I was on set to interview a panel of global experts on the butterfly effect of geopolitical issues that were then dominating the headlines.
November was just days away, but it was, I recall, so warm that even the ducks on the Aussenalster Lake didn’t know whether they should stay put or fly south. They were not the only ones who were befuddled. If I had to give you one takeaway from this gathering of intensely wealthy and influential people, a conversation repeated week after week when I met with them privately, it is that the world has somehow changed.
Some of the commentary was sobering. While I cannot reveal the identities of who was in attendance, a comment I heard from a former president of an EU country while I was moderating that morning’s ses- sions made me sit up. This former president claimed that the war between Russia and Ukraine would last for years, and Russia wouldn’t be allowed back into normal relations with the EU for at least twenty years after Putin had left the scene.
I instantly pivoted toward my audience and underscored the need to rethink the possible longer-term consequences of a lasting war in Europe. Over the course of three days, while I was having one-on-one meet- ings with our clients, learning how I could help them achieve their goals, we heard from the industry and government leaders onstage. From well- connected sources in Asia and the United States, we learned that mainland China, outwardly supportive of Russia, was, at that point, being careful not to overtly cross America’s red line by busting sanctions and providing Russia with material support, even while we all had a keen eye on mainland
China’s relations with Taiwan.
The chart showing the Russian markets’ brutal plummet since the invasion was sobering, and a harbinger of what would probably happen to global markets if hostilities erupted in the South China Sea, disrupting the far more important Pacific Rim economies. That’s what my team and I do: we look at the markets in a judgment-free way, putting aside all the political
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or moral ramifications of the hypothetical scenario we’re entertaining, and instead ask ourselves, Are our clients’ portfolios robust enough to withstand whatever shock the world might throw at us?
We were specifically asking ourselves: What portfolio hedges do we have in place to blunt the fallout of such a catastrophic Pacific-basin war and disruption? But there was also information exchanged leaning toward the upside.
The silver lining of the Russia-Ukraine war was that Europe was rapidly weaning itself off Russian oil and gas and furiously building up its green- energy infrastructure. Just days after our event, as if to underscore this point, the French senate passed legislation requiring the nation’s large park- ing garages to put solar panels on their roofs, with one stroke legislating into existence some eleven gigawatts of homegrown energy, equal to the output of ten nuclear power plants.3
From the brilliant scientists flown in from Boston, we heard that the process of creating cutting-edge immuno-oncology drugs theoretically capable of eradicating certain cancers was migrating, even at the initial stages of discovery, from the laboratory to the laptop. We heard futurists and a Nobel laureate in economics riff about the future of work, about productivity, and about how cities themselves need to be reinvented for the new way people want to work.
The concept of impact investing, as a means to become a steward of the planet, was another topic that frequently came up. Despite the dire headlines emanating from the United Nations and academic studies about missed emissions targets, we were told that investing 2 percent of global gross domestic product (GDP) annually in environment-friendly technol- ogy and infrastructure could prevent catastrophic climate change.
After a gala dinner at Hamburg’s newly opened museum Montblanc Haus, the event closed on the final day with a cofounder of one of the iconic firms of the digital age striding across the stage and pressing home his message that none of our companies would survive if we were “unwilling to disrupt” ourselves. The successful companies of our times must have a culture and “tolerance for risk” that endlessly “tries a lot of bad ideas”4—to find that one true gem on which tomorrow’s fortunes are built. So perhaps
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it was no surprise that the financial sophisticates in the room knew they had to adapt.
But how? they asked me.
That’s the subject of this book: how we must all change our way of investing to meet the needs of our times.
The sheer volume of assets my team manages at UBS means we can afford to go to great lengths in our efforts to provide our clients the information needed to make better investment decisions. But moving large amounts of capital in the markets also means the investment pronouncements I oversee can sway the direction of capital markets. These are some of the reasons why the globe’s most powerful financial institutions and the very wealthy—those forty billionaires gathered at the Fontenay, for example— want to know what my team and I are thinking about the markets and what our latest ideas are about where they should be investing—and how.
Well, this book is not just for them or restricted to Wall Street professionals.
This book is equally for you. It is meant to help you, the lay reader, become a better investor and, I hope, help you steadily accumulate wealth over the course of your life, in all its varied material and nonmaterial forms. You might miss a few of my more technical financial and economic expla- nations along the away, but that’s okay, because they are not the core of what it means to become a better investor. If you stick with me through the unfolding chapters, you will, I promise, walk away with a deeper under- standing of how markets really work, while also learning practical tips on how to create greater wealth during your lifetime.
In broad strokes this is what I will help you understand:
• How to follow the money to see how the world has profoundly changed
• How this change has made investing more complex
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• How it requires you to change your approach to investing
• Why the risk-adjusted returns of self-directed clients underperform clients who work with advisors to invest in our asset-allocation solutions
• Why you should think about your wealth in three portfolio “buckets”
• Why possessing self-knowledge and incorporating your personal money issues into your investment process are important
• That the most inspiring investors today are transforming how we invest in the future through a technique called impact investing
• That, if you follow the money, as we will do, it is possible to imagine how investing will be different by the middle of the twenty-first century
• How cultivating humility is essential to becoming a successful investor
Now why, you might ask, would I share my knowledge with you?
The simplest answer is that at age fifty-three I am in that stage of life when I am concerned less with writing my résumé than I am with writing my tombstone. This is one way I hope to give back to the world.
But that’s a grandiose response. The more mundane and important truth is I needed to write down and articulate my own thinking about investing over the next twenty-five years because it is going to be different from the past twenty-five years in many ways. I would go so far as to say that many of the time-tested rules of investing, when put in practice today by the average investor, are dangerous to their wealth.
A key to investing successfully for the future is understanding where the big pools of capital, both private and public, are flowing, and incorpo- rating that understanding into your investment process. I can’t stress that enough. Arguably the most profound change underfoot in capital markets these past few decades—a force so powerful it has upended how we invest— revolves around governments’ increased role in the global economy.
Another key to becoming a successful investor is understanding who
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you are, where your skill level is at, and how wealth benefits can flow from an investor operating with a sense of humility. If you think you are going to be the next Warren Buffett, terrific; I think there is information in this book you will find useful. But the book is also an argument that you are probably not able to pick stocks as Warren Buffett did when he started Berkshire Hathaway. The world has changed too much. And that is okay. In fact, that’s probably a good thing, as long as you adapt your investment plan accordingly.
What I mean is this: the 1970s called on a rotary phone and is demand- ing its investment theory back. Stock picking in the form of Buffett-style value investing—the skill of finding company shares that are a good value relative to their earnings potential, which is an investing technique still cel- ebrated in hundreds of new books continuously rolling out—is not where most people should be spending their time as they learn about investing and managing their wealth.
I am not saying that reading the financial statements of hundreds of companies to locate a mispriced gem is impossible today, and I am not saying that bargain hunting isn’t fun. But as a wealth-generating strategy, it ain’t what it used to be. For most of us, trying to spot undervalued stocks when they are out of favor in the hope they will become sexy again is a recipe for failure in today’s financial markets, largely due to all the macro and structural changes that have unfolded in recent years and are still underway. The supremely talented can still do it. But many of us profes- sionals have come around to admitting we can no longer use these outdated techniques the same way.
Even David Einhorn, one of today’s great Buffett-style value investors known for his stellar results at the hedge fund Greenlight Capital, has gone public about how he was forced to change his value-investing approach. He now views markets “as fundamentally broken” and attributes this breakdown in traditional investing to the fact that passive investing has so completely taken over the landscape. “The value industry has gotten completely annihilated,” Einhorn recently admitted on Bloomberg Radio’s Masters in Business.5
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The first part of this book is about how the investing world has changed since I began as a value investor thirty years ago, and why you need to understand the big changes if you want to have any hope of developing a successful investment strategy in today’s world. But there is more. I also learned in the past thirty years that being narrowly focused on developing a successful investment strategy is not the way for most people to effectively protect and grow their wealth. What I believe makes my view of investing unique is that it is informed by the knowledge I have gained in my role as private banker to the world’s great and influential investors.
After a hedge-fund career, I am now the longest-serving private banker on the executive committee in the UBS Global Wealth Management divi- sion, and much to my own surprise, I have become one of those insiders in the secretive world of Swiss banking. That means I personally meet with hundreds of the world’s wealthiest and most influential families to discuss how they protect and grow their wealth.
The world’s billionaires (as well as hundreds of thousands of other investors) turn to UBS to protect and grow generations of their families’ wealth. What they have collectively taught me about wealth far exceeds what I’ve taught them, and the techniques and attitudes that they deploy on their journey to increased wealth should help set this investment book apart in a crowded field.
In the end, all the investment theory in the world is useless, even dan- gerous, if real people don’t have effective ways of applying those ideas to their real-world investment portfolios. UBS would in fact not be UBS if our advisors were not capable of holding an introductory meeting and demon- strating their value to prospective clients so that they can win new business and keep it. What are they doing in these meetings to show commonsense people the value of entrusting their wealth to UBS? We are going to show you the “hacks” we have developed over the past 160 years that are proven to work for real people, not just theoretical “rational actors” or the ultrarich. But the knowledge flows the other way, too, and here’s one essential lesson I have learned from my clients in my transition from hedge-fund manager to billionaire advisor: it is likely that you manage your investments,
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as I did when I started out in the industry almost thirty years ago. In con- trast our successful clients manage their wealth. That’s an important distinc- tion. This worldview is not just about learning how these wealthy clients achieved a different mindset for how to use money as a tool to increase the quality of their lives. It is also about how this mindset leads many of our top clients to focus on a different way of investing. After showing you how they see the investing world today and teaching you how to follow in their footsteps, we’re going to put all these wealth-management techniques together with some examples from real clients.
The issue at the heart of this distinction between wealth management and investing is the understanding that our clients are, well, people. They are out there living their lives; they are not the mythical “theoretical profit maximization machines” that so many economic and investment books are based on. All the textbooks in the world can’t prepare you for what it is like to be a real person investing in the real world. That’s why I am going to spend time addressing “soft” issues such as your personal hang-ups around money, so that your process ultimately expands enough to be about managing and building wealth in the broadest sense—and not just about anxiously tracking the day’s hot stock or index fund.
Don’t despair. It’s confusing, I know, even for the wealthiest and most talented. But the new rules of investing I outline will address these micro issues and the new macro reality we live in and provide you with a solid, actionable framework for managing (or working with others to manage) your wealth in an ever-changing environment.
Before we plunge in, please know that the most important concepts to take away from this book, from an investor’s standpoint, are learning how to allocate assets and then learning enough about your personal money issues to avoid sabotaging your results.
But the most important point to grasp about how the markets have changed in the past decades, and how we must change our investment
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strategies accordingly, is following the money, and today it’s government intervention that’s shaping markets.
Since that profound macro issue affects everything we do as investors, I begin this book by explaining this big shift before we get down to the essentials of portfolio construction and how to manage your wealth in a more fulsome way. That’s why chapter 1 looks at how a changing world is forcing us to reorganize our investment thinking around what we call the 5Ds of disruption.
Chapters 2 and 3 look at how buying what the government is buying became the big new investment strategy during the 2007–2009 finan- cial crisis and how to use this strategy in the future. Chapter 4 switches gears to argue that while you should understand that the investing world has changed, the fundamentals of asset allocation remain the core of successful investing.
Chapter 5 contains practical advice about knowing yourself, and why that is essential if you want to be a better-than-average investor. Becoming a great investor is never about beating others at the investment game but, as Warren Buffett and his mentor have often pointed out, all about mastering your emotional money-related issues.
In chapter 6 we will discuss how over 160 years of experience working with actual clients led us at UBS to combine both traditional and behav- ioral finance in the UBS Wealth Way* investment system. This real-world investing approach has helped thousands of people improve their returns and feel more secure about their investment plans.
In chapters 7 and 8, we turn to the emerging investment trend of the twenty-first century, which our clients are creating and leading. We’re going to show you, via real-life client stories, how these innovators are mashing up the rules in this book by infusing their investment choices
* UBS Wealth Way is an approach incorporating Liquidity. Longevity. Legacy. strategies that UBS Financial Services Inc. and our financial advisors can use to assist clients in exploring and pursuing their wealth-management needs and goals over different time frames. This approach is not a promise or guarantee that wealth, or any financial results, can or will be achieved. All investments involve the risk of loss, including the risk of loss of the entire investment. Time frames may vary. Strategies are subject to individual client goals, objectives, and suitability.
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with personal purpose and meaning at the same time they are investing in and around the great issues of our age. How impact investing, currently practiced by a tiny elite, is likely to develop in the future and within the mainstream is the subject of our final thoughts. The last chapter is a bonus rule, and it makes the case that humility is the most underrated of investor qualities and demonstrates how it can pay for itself when facing the fury of the markets—a lesson applicable to all the previous rules.
By the end of this book, you will have digested real-world client studies drawn from all over the world and enough investment theory to emulate the practices we have demonstrated to work. All of this should empower you to make a more informed decision about how you invest, how much to manage yourself, and what to look for in partners or advisors.
Finally, I hope to give you tools that help you learn—all so you can be happier with both the results and the process.
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Mark Haefele and Richard C. Morais The New Rules of Investing: Essential Wealth Strategies for Turbulent Times Harpercollins Leadership / HarperCollins India, 2025. Hb. Pp.234
The rules for investing have changed. Don’t get left behind. Reboot your approach with this timely guide from a wealth management powerhouse.
It’s not hard to grasp why we need to change the way we think about investing. Over the past twenty-five years, new developments in world affairs, demographics, technology, and more have disrupted the old reality—and these changes directly affect the financial markets and your individual portfolio. Stock picking and Buffett-style investing are the financial tools of a bygone era, yet many investors are confused about what should take their place. So what do you need to know to protect and grow your wealth in these turbulent times?
As the chief investment officer of UBS, the world’s largest and only truly global wealth manager, Mark Haefele oversees the team that manages and advises around $4 trillion of clients’ invested wealth. Mark has spent decades advising investors of all kinds—from high school students to government officials and UBS’s unique global roster of billionaires. This has enabled him to sharpen his perspective while watching the old rules fall by the wayside.
In this playbook for protecting and growing your wealth, Haefele shares the investing strategies he uses at UBS and distills his battle-tested philosophy into a set of actionable rules that can guide you into a secure financial future. You’ll walk away knowing
· How to follow the money—see where governments are investing and how this insight can drive your own investment decisions.
· Why you should allocate assets and think about your wealth in three portfolio “buckets” that cover short-term, long-term, and legacy scenarios.
· How understanding yourself and your personal money issues pays off—literally.
· How to get results beyond the balance sheet via impact investing, which allows you to grow your portfolio while benefitting causes you care about.
Accessible explanations, client case studies, personal stories, and bottom-line summaries make The New Rules of Investing a resource you’ll consult time after time. Whether you’re a novice working with a financial advisor, an experienced investor, or an investment professional, you’ll be better equipped to manage your wealth more efficiently, calmly, and successfully.
The book excerpt that has been published here is from the introduction to the book. Hence, it outlines what is laid out in rest of the book, chapter by chapter. It gives an overview of what to expect and how to use the advice constructively. This is what the Nobel Laureate for Economic Sciences 2001, Michael Spencer, has to say:
‘The New Rules of Investing presents a compelling argument that the investment environment has changed in consequential ways in the 21st century. In readable prose, it explains how investors can react to powerful new forces and shocks. These structural changes in process and in prospect are usefully captured in the 5 D’s: debt, de-globalization, decarbonization, digitalization, and demographics. A very useful framework for navigating in a rapidly changing world.’–
Mark Haefele is the global chief investment Officer at UBS, named World’s Best Bank 2024 by leading financial publication Euromoney. Mark oversees the investment policy and strategy for around $4 trillion in invested assets at UBS. He leads a team of about 1,200 investment professionals whose passion and focus is to help clients reimagine the power of investing so they can live the life they choose today, prepare for their lives tomorrow, and improve the lives of others.