Ricardo "Rick" Cortez
Meet the Economic Mind Bridging Portfolio and Wealth Management in a Compelling New Way
To the average person, philosophy is no more than a set of ideals or beliefs used to describe behavior and thought and not many would make the connection between it and matters of the economy. But as a learned student of the booms and busts, Ricardo (Rick) Cortez, has not only understood the relevance between these areas, but successfully employed them in unison throughout a distinctive 40-year career.
Rick’s foothold within the fields of economy, academia, and the full spectrum of investing has left an indelible mark on the students, colleagues, and clients, who have had the good fortune of working alongside him, but the magnitude of his impact can be accurately described as societal.
To abridge such an illustrious career for the sake of an editorial is not only an arduous task, but one that brings forth the challenge of “what could possibly be excluded from this incredible story?” We wanted to know and share more than what would appear on Rick’s résumé. In pursuit of this endeavor, we spoke with Rick to learn more about his motivation, his passions, and his incredible journey.
Rick, let’s set the stage with the philosophy that has guided your entire career. Why is it so important for both advisors and investors to understand the connection between economics and investments?
Economics fuel everything. It explains most of the major social and political events in our country, so it’s important to recognize its relation to financial health. The fact is, in order to really understand money—economies, finance, the stock market, etc.—you have to study psychology, sociology, and historical trends. Really, the study of economics and the market is the study of philosophy.
Will you give us a brief synopsis of your current role?
I accepted my initial appointment with Broadmark Asset Management LLC, as president of global distribution in 2009 and then, in 2013, I became co-CEO. I am now the chief risk officer and a member of the investment team, leading global sales and marketing efforts and sharing in the oversight of the firm’s business operations.
And can you give us an overall view of Broadmark Asset Management?
Yes. First and foremost, we are a portfolio management firm, not a wealth management firm, and although we may often perform in the space between the two, we are ultimately focused on risk management in equity markets. Our strategy differs from most in this arena because it is both discretionary and directional, as opposed to traditional hedged equity. The process was designed to counter conventional buy-and-hold investing and allows for a flexible investment mandate within all market environments.
For those of us who aren’t knowledgeable of the nuances you mention, can you elaborate a bit on the advantages of the Broadmark strategy?
Most investment managers try to find companies that are reasonably valued and purchase those stocks for capital appreciation. We don’t do that. We want to see positive returns every year and in order to do that, we need to have a way of participating when the market goes up, and more importantly, attempt to protect capital when the market goes down. We invest only in the broad market indexes. We do not invest in individual companies. Our goal is to manage the downside risk. That’s what differentiates us from others—we have historically mitigated risk better so that there has been little decline. In the words of Warren Buffet, “Rule Number One is ‘Don’t lose money;’ and Rule Number Two is ‘Don’t forget Rule Number One.’”
Obviously, you have a purpose behind what you do. Will you share what motivates you and how it benefits your clients?
Steve Jobs said that passion, persistence, and hard work are important, but the most important factor in success is your purpose. I believe that my purpose is to help investors protect their capital during adverse market conditions while achieving a reasonable long-term return. To that end, I have studied the historical cycles of the economic and financial markets extensively, particularly the booms and busts; times when the market really got hurt, like the Depression and the Financial Crisis of 2008. During these times, even the strongest companies crumbled, so my examination was not only predicated on how to navigate volatile markets, but how to manage and adapt to crises through market analysis. This requires a knowledge of history, economics, psychology, politics, social studies, statistics, probability/game theory, and mathematics, as well as a profound knowledge of traditional finance, but it is absolutely essential as the stock market becomes increasingly risky as a result of disruptions from the COVID-19 pandemic, the enormous debt levels in the U.S. and globally, and intense speculation and overvaluation of financial assets.
You share your immense knowledge with clients, but you are also very engaged in academia. Can you tell us about your roles as an educator?
I am a lifelong student, so I believe in the power of education and the progress it facilitates. I’m an adjunct faculty member at Harvard University, and, as a Queens College alumnus, I serve on their business advisory board. I have also been a guest lecturer on Investment Policy and Hedge Funds at the Wharton School, University of Pennsylvania, and I mentor executives in the Leadership Pathway Program for the Money Management Institute (MMI).
I know you have many passions but what in particular do you enjoy most about your career?
I think what I enjoy most is interacting with people, learning from them, and discussing finance and how the proper management of money can lead to a better life. I also appreciate my travels and learning about other cultures and their economic influences. My career gratification can also be credited in part to my partner and the firm’s founder, Chris Guptill. He created the systematic strategy that we use, which allows us to serve our clients so well. This not only promotes personal satisfaction but is reflected in the $1.3 billion that we manage today.
In 2020, Rick was awarded the President’s Medal, the school’s highest administrative honor, by his alma mater, Queens College, and received the Lifetime Achievement Award from Marquis’ Who’s Who in 2021. He holds a Certified Investment Management Analyst® designation from The Wharton School.
Broadmark Asset Management LLC