There are lots of route to investment success. TCFP has simply chosen one that makes sense to us and our clients. The key elements of it are that it is:
- Easily understood;
- As cheap as possible;
- As liquid as possible;
- As safe as possible.
It also attempts to remove bias wherever possible and to avoid taking active decisions about currencies, industries and geographies. We believe in the “wisdom of markets” – the idea that the market decides who the winners and losers will be – and therefore are involved in all of them and not try to second guess who will be right or wrong.
The sole aim of our approach is to adopt one that it is likely to produce returns better than inflation over time. This approach has been successful so far and easily understood and managed, it is pretty low maintenance.
But it’s important to note that there are many equally good and even better approaches. These different approaches are either beyond our skill sets and/or downright scary and/or not easily understood (if at all) and/or expensive etc.
The point is what we do sits comfortably with us and within our abilities and it produces results we can all live with as well as long term success.
So, there are lots of ways to succeed in investing and we have crafted our own. Conversely there are very few ways in which to fail. Namely:
- Allowing your emotions to get the best of you.
- Chasing fad investments.
- Not following an investment plan.
- Thinking you’re smarter than the markets.
- Being overconfident in your abilities as an investor.
The really good news is that you only need to avoid these for your chosen investment strategy to succeed.
However, the issue is, that avoiding them seems to beyond the ability of most humans. The difference between the average investor’s return and the average investment return confirms this beyond a doubt (SEE HERE).
So, what you should be paying fees for is NOT for a killer investment strategy but for a killer financial planner who can get you to stick to a strategy.
When was the last time you saw that advertised by any financial institution?