In 2009 as the world began to emerge from the global financial crisis, I began a research process that was to last a year.
My firm manages hundreds of millions of pounds (£) of our clients’ money. This wealth has been hard-won and is earmarked to support retirement, education, travel, and everything that makes for a fulfilling life.
Acting as our clients’ Trusted Adviser is a privilege and a role we take seriously, so it’s vital that we leave no stone unturned in our quest to identify the most effective way to invest.
The Research Process
Our analysis was sourced from some of the leading academic institutions in the world, such as the University of Chicago, Harvard, and Oxford.
It’s factual, evidence-based, and consistent.
Here’s what we found.
Let the markets do the heavy lifting
It may not be a completely fair system, but capitalism works. All human ingenuity is harnessed within the capital markets, and you can reap the benefits by owning a piece of it.
Risk and return go hand in hand
If you invest in assets that are considered riskier, you expect to receive a higher return.
Shares in companies are considered risky because their values fluctuate – so you can expect greater returns than by holding cash.
80% of Fund Managers Underperform
It’s extremely difficult for professional managers to know what companies will outperform in future – but that doesn’t stop them from trying.
Unfortunately, the results are poor and yet these underperformers still deduct large fees that erode investors’ wealth.
To be avoided.
Conclusion
Searching for the latest ‘star manager’ is a mug’s game as the odds are stacked against you.
To improve your chances of investment success, invest in a low cost and globally diversified portfolio of shares and bonds – and hold for the long term.
Listen to Warren
“I recommend investing in index funds and have for a long, long time”.
Warren Buffett
