One of the more common approaches to investing is the use of the hot tip, the gut reaction and the belief that investments can be consistently bought at the bottom and sold at the top.
Life is just not that easy.
Boom and bust has been a reality for succeeding generations. An early example is the tulip bulb craze in Holland that started in 1634.
The tulip bulbs of the time were subject to a non fatal virus which caused the tulip petals to develop contrasting coloured stripes. The more bizarre these stripes became the more valuable became the bulbs.
Tulipmania set in (hard as this is to believe and isn’t hindsight a wonderful thing!) and the Dutch people began to view tulip bulbs as a very smart investment.
The Dutch people even began to barter their personal possessions to buy the bulbs that would make them wealthy as prices continued upward.
Of course, there had to be an end and eventually the market collapsed under the weight of speculation - the bubble burst.
Many Dutch people lost their life savings. This theme has been repeated many times in the years since and will undoubtedly happen again.
That is one of the weaknesses of investors. We tend to be governed by emotion when it comes to dealing with our money. And emotion is not a good trait for successful investors.
One of the strengths that we hope we bring to our relationship is that we are the non emotional partner.
Our focus is on the achievement of your financial goals. To make this happen we need to create a system which, in as far as possible, operates on pre-set criteria, is not short term in nature and which is consistently applied.
That doesn’t mean that we are not always searching for better ways of developing and implementing investment strategies and continuing to invest in research and technology. We are committed to doing these things.
But we are also committed to getting you to your financial goals as safely as possible.
That is one of the key reasons for these articles - to help remove the emotion and replace it with an understanding of what makes a good investment strategy and more importantly - what are the skills to make it work.
