As Wimbledon continues, the temptation to use more familiar metaphors is fairly irresistible. So what do I mean by “Advantage”? well in short, I believe that the investment world is largely stacked against investors like you and I. It is full of jargon and “complex arrangements” and a constant array of “winning strategies”. The plain truth is that the investment world has conspired against you in order to part you from your money, which is then often invested in a way that sees your share of the upside considerably reduced and yet your share of the downside largely inflated.

You could be forgiven for believing that investing is gambling and I’m often asked what I think will happen to…(fill in the blank). In other words a forecast or more likely a guess. I have no idea what the markets will do tomorrow, this afternoon or indeed next month. Eh? aren’t I meant to? well – only if you believe that investing is about picking the right stocks and timing the markets. The truth is that I cannot do this successfully, by which I mean repeatedly with a proven process. In my defence I would suggest that NOBODY can and have plenty of evidence to back up my claim. However it is possible to have a worthwhile (profitable) investment experience.

Investment is actually quite dull, scratch that, its actually boring. So the investment world tries to gloss things up with performance charts and star managers/performers along with lots of bright lights and noise. All but a very small proportion of this is utter hogwash. Successful investing is about applying discipline and stopping yourself from getting caught up in the ego inflamed noise that is reported across all financial media. I actually don’t care if Mr B is the best investor since 1948, it makes no difference to you or me. What counts is your investment strategy and successfully reaping the returns for the risk you are prepared to take.

One of the many advantages of proper financial planning is that we figure out what returns you need and what level of investment risk is therefore required to achieve your objectives. We then construct an efficient portfolio which has a long-term perspective and don’t meddle with it. By efficient I mean that the method of investing successfully is minimised and handled carefully, not cheap or cheapest, but considerably less expensive. We apply discipline to a process that works.

So as you read that the FTSE100 had fallen over 800 points since May 22nd what are your thoughts? panic? does it make a difference to you? Are all of your investments in the FTSE100? No (well I hope that’s your response). Investing is long-term, so why are you investing money if you need it in the next 5 years? if you are only investing in a few shares (the FTSE100) then you do not have a diversified portfolio which is very unwise unless you are a beginner in the investment world (literally starting out to build your funds). If you are tempted to sell your holdings having seen them fall, are you expecting things to get worse? and when do you expect them to recover? how would you know where the bottom is? (they don’t ring a bell). Are you tempted to sell on the way down and buy once the good news is out? (classic buy at the top, sell at the bottom, which has the only outcome of financial ruin).

Discipline and theory are all well and good, but do you possess the self-control to stay the course when all around is panic and mayhem? Isn’t it time that you reclaimed some investing advantage, by having a properly costed, diversified portfolio that is established in-line with your goals and within your risk comfort levels? Isn’t it time you had the advantage of a disciplined process with a thought through philosophy based on evidence?  Its time to turn the tables on the financial services industry that have consistently failed to deliver. Hey, its your money, if it doesn’t deliver, it will be you that has to live with the consequences, not the investment world. So pick up the phone and have a conversation with me to find out what advantage Solomons can provide.

Dominic Thomas – Solomons IFA