Cassandra Toroian: Don't Buy the Bull

After dropping out of law school, Cassandra Toroian pursued her MBA at the University of Miami. Not long after, The Wall Street Journal named her an All Star Analyst for her 1999 stock picking, and from there her career took off. She was a founder of Cohen Bros. & Co. before launching her own investment company, Bell Rock Capital, where she currently works with her life partner, Jackie Blue. Toroian has appeared on CNBC and Bloomberg TV and was featured as a People magazine Hero for helping out a single mother who lost her home in South Florida. Now, Toroian has a new book out, Dont Buy the Bull: Dispelling Disastrous Investment Advice and Money-Myths in Our New Economy, in which she offers tips on how to get through these tough economic times. Out took the opportunity to chat with the financial whiz about what it's like to be gay in the business world and why LGBT couples need to be even more careful with their investments. Out: You mention in the introduction of your book that you dropped out of law school and decided to go for your MBA. What drew you to pursue a career in finance? Cassandra Toroian: Well even as a child I was really interested in investing for whatever reason. Im not sure why, but from what my mother tells me, I started asking questions about the stock market when I was only 11 years old. I wanted to understand how it worked. But at the same time, my only concept of what the stock market was as far as a career was to be a stockbroker, and I knew for sure that I never wanted to be that. That just seemed not what was really inside of me. I always had this passion for the law as well, so I thought, Well Im going to go get my law degree. Then I guess once I got into law school and I started coming home and watching CNBC everyday I just got exposed to [the fact that] theres more out there then just having a career as a stock broker. I could see just from watching CNBC -- they had analysts on, fund managers -- there was this whole world of finance that I really didnt know about before. So thats when I decided I could finish law school and then go learn about this investing stuff, or I could just drop out now and not waste another two years of my life in the grueling law school process. So I decided to go that route. Was starting your own company always in the back of your mind, and what was that process like? When I opted to go back to get my MBA and drop out of law school, the first thing I tried to do was just convince my dad to give me money so that I could start my own business. And he was like, No, you need to learn more and go work for other people before you start your own thing. And my father owned his own business, so I kind of always knew somewhere in the back of my head I would be ending up on that path. But it was a scary leap when I ended up doing it for the first time. I had a lot of help at home and in the background to give me the courage to do it. I couldnt have done it without my partners [Jackie Blue] help. I was part of a larger firm that I helped create in the late 90s and early 2000s, and it grew very big. And when I left there to take the leap of faith to truly be on my own -- it was really with Jackies encouragement and faith in me that I was able to do it. Finance is very a very male-dominated profession, but in your company the top four executives are women. Are men more comfortable with allowing women to invest their money now? I think I realized when I started out in the investment business, right out of business school, that this is a very male-dominated business and that the only way that you were going to make it as a woman was to have a thick skin, not let every little comment offend, and to be smart if not smarter than the guys around you. But also know how to interact with men in a way that they arent looking at you as a sexual object. Its a very fine line for women -- if they are too good-looking, theyre not taken seriously even though they could be the smartest person in the world; if they are not good-looking enough, then they are probably not going to get ahead. I hate to say it that way, but thats the mentality of a lot of people in the business. I think its just kind of happenstance that all the people that work with me in the senior role are women. Weve had other people work with us in the past that were men, great guys that werent in any way intimidated or upset working with a bunch of women. It just kind of happened that way. Id say most of the clients we have are actually men, and I think thats because a lot of our clients are more entrepreneurial men that are busy running their own businesses. We obviously know what we are doing, and they feel that they can talk to us on a business level and feel comfortable. And at the same time they maybe have been burned in the past by some men in the industry, so theyre like What the heck. Theres nothing wrong with dealing with a woman. So they try that route and they like it. Are you finding over the years that more women are getting involved with managing their own money? I think more and more women are realizing that they cant let somebody else watch it for them. They cant have their spouse or partner just take it over and deal with it for them. They are waking up and realizing they need to have some baseline understanding of whats going on. I think thats a longer-term mentality shift as people age. The younger generation of women is more conscious of their own 401K investments and the money they are saving for retirement than maybe generations above us, like the people in their 50s and above. Since the stock market crashed I think that changed a little bit, though. People even in that older category of women are realizing that they cant just pass it off to their partner to deal with. Not only were you challenged because of your gender, but you had to deal with being a part of the LGBT community as well. Were you always out, or was it something you had to reveal more strategically? No, I was definitely not out in the beginning. Again, because its a male-dominated business, number one. And number two, I was always a specialist in the banking sector, which is not only a very male-dominated sector, but also a very conservative sector. I would go to a bankers convention, and literally at the beginning of the morning meetings they would have a prayer. The last thing I was going to do was walk in with a rainbow-collared suit on. Two things [helped me]: my partner Jackie had been a very senior level executive at a major bank for a number of years, and she was out. Shes ten years older and me, and so she was a role model for me in the sense that she made me realize that you can be both. And if she was able to do it in her bank, that was a road map for me to realize I could do this too. And number two is that I was in love with her, and I didnt want to hide my relationship. Frankly no client of mine has ever said, I cant deal with you because youre gay. How did your family take it when you came out to them? Well, my dads Armenian and my mom is Greek. I waited until I was out of the house, established, making really good money, and still it was not easy. I never thought my mother would get to the place where she would accept it in any way. The day I told her -- for months afterward it was just horrible. Id be at work and shed call me and just start screaming at me. It was really bad. But what really helped was her seeing that I was still the same person. Nothing about me was different. When I got into a relationship with Jackie about eight years ago, they really loved her a lot. I think in their minds now they put it in the category that we are just best friends that live together. The other thing is when we go to family functions and stuff, its just not acknowledged in any way. Its not bad, its not good, its just, Oh, thats Jackie. But Im OK with that. All of the top investment firms have upped their LGBT recruitment recently. Do you feel that there are positive changes within the industry? Is it becoming more LGBT-friendly? I think that (and maybe this is my cynical side) what theyve realized at some of the larger firms is that theres a lot of money in the LGBT community. And by not targeting people to try to cultivate that community they are leaving a lot of money on the table. I think its really financially driven more than anything else. Yes, I believe and know some of these senior executives have gay family members and they want to make sure that their firms are run in a way thats inclusive to the LGBT community. But at the end of the day they are going to do things that are going to try and make them more money, too. In most states LGBT couples arent granted the same rights as straight couples. What are the challenges you have to face when managing the finances of gay people? The sad part about it is that a lot of the people that come to me are already established and have a bit more money -- lets call it stuff: net worth, houses, assets -- that they have to worry about protecting and passing over to their partner. From an estate perspective -- thats really where it gets the most complicated. We simply manage the investments, but oftentimes weve got to encourage them to go talk to some sort of estate lawyer to put trusts into place and sometimes get insurance that the average married couple wouldnt have to deal with. The average married couple doesnt have to spend money on lawyers to protect their spouses from an estate planning perspective and they dont have to go buy special insurance to pay taxes. Thats number one. Number two is that sadly a lot of people out there have a partner that has a pension or is collecting social security, and when that person dies, unlike in a straight marriage, their partner is not going to get all their retirement benefits. So its even more important for the gay couples out there to save for retirement. So in other words gay couples have to plan even further ahead than straight couples? Absolutely. And the other thing too, and I hate to put it this way, but at least for lesbians, a lot of them dont protect themselves. I talk about this in the book: you need to have a prenup. You need to have a cohabitation agreement. We all want to be in a committed relationship forever, but its just not smart for anybody, straight or gay, to not have something in writing at the beginning when things are good and everybody is happy and in love. Ive seen a lot of lesbians end up five, seven years down the road having an ugly breakup and ending up getting financially hurt, big time. It can be really bad. And there you are five or seven years older and now youve got to recoup what youve lost, and that puts you further behind in your retirement savings. You offer hope for people struggling in this economic crisis. What are your thoughts on the way the recession is progressing? What can we expect for the second half of this year? Were still coming out of a recession, theres no question. Its not a very strong recovery. Theyve been telling us for over a year that its not going to feel very good, because theres a lack of jobs that have been created. We have so many millions of jobs that we still need to make up for that have already been lost. I think we are still on the path out of recession, but its not very strong. And the BP oil spill really set us back, because this is already a part of the country that has high levels of unemployment. Florida real estate values were finally looking like there were going to stop sliding downward, but now I think youve got tourism that is going to suffer, youve got a lot of people that are out of work. Theres just a big uncertainty, and I dont think any of that is yet factored in to the economic statistics that are out. Over the next month or so its going to become more evident. To me, though, even if the market falls another thousand points, which I think it could in the short term, thats just an opportunity for people who have been sitting on cash to put money back into the market at a lower price. I dont think its going to be the end of world. It just means you need to be smart and pay attention to what is going on so you can use it to your advantage. Don't Buy the Bull: Dispelling Disastrous Investment Advice and Money-Myths in Our New Economy is available in bookstores now. For more info on Cassandra Toroian, visit BellRockCapital.com.Send a letter to the editor about this article.