Weekly Thoughts 30 November 2018

While scrounging around in articles I keep to maybe use for these newsletters, I found an investment brochure from October that I had been keeping after attending a fund manager presentation. I had highlighted only a couple of pages and points to share.

The first is a term called short-termism. Warren Buffet suggested that there was a danger around short-termism. A comment from Donald Trump was that when he asked some top business leaders what would make business better, or easier, they said “Stop quarterly reporting and go to a six month system. It would save money.” I personally think unit trust investment reporting should do the same.

A measure of one of the stock markets vs. the average investor over 10 years to end 2014, showed that the investor who was making their own switches based on their own opinions and observations, created returns for themselves that were almost 50% lower than the market average. This is because they look too short and then try to time and switch their investments themselves. What is needed? Good selections in the beginning, for the right reasons, then leave it alone. Check once a year that your investment is still in your name, look at its value, check that the management company has remained sound, and leave it alone.

Thoughts from another page next time.