TODAY’S BLOG

WHAT WOULD YOU GIVE TO GO BACK IN TIME?

The concept of time is something that we all like to play around with. We recall memories, sometimes embellished, some highly accurate and others somewhat muddled. We encounter the present with our baggage and sense of identity based on the past and have hopes for our future.

To travel through time is what we all do, on a daily basis, yet to time-travel, well that is something for the writers of science fiction. As we all know, there would be some significant advantages to be gained if we could “correct” our own actions and perhaps those of others in the past. The chance to have another, better attempt at anything with the advantage of hindsight is the fuel of regrets and if only…

Time flies, The Old Bakery, Solomons IFA

Do we ever learn?

History is a great teacher, it is in many respects the best way we can apply “hindsight”. Yet we so readily ignore its lessons. Human behaviour has not really altered much over the years. We are having to adapt to new things all the time, but our nature seems slow to learn. The repetitive nature of war, division and “inhumanity” are sadly familiar. We don’t seem to learn.

Long-term thinking

The same is true of investing. We don’t learn very easily. Investing in equities (shares) has been proven time and again to provide the most likely way of increasing wealth above the rate of inflation. Looking at any long-term horizon, when considering the total returns (increase in capital value and income paid out by way of dividends) there is ample evidence to hold the very firm belief that over time, years and decades, equities are the obvious choice.

I can already hear you thinking “but…” and that’s what I have come to appreciate. We are not built for investing. Human nature has been built around the very useful instinct to flee at the sight of threat. This is helpful in a world of beasts and the beastly, but not in the sophisticated world of long-term equity investment. Every sign or signal of “downturn” is met with fear and panic. Pundits and journalists alike are designed to be storytellers, having something to say is better than the alternative. We hear “billions wiped off the market” yet we never hear “billions wiped on the market”. The news is skewed, we thrive on drama. Yet this passes and is arguably a vital aspect of equity markets, which always recover. Always. The crash comes, recovery comes, repeat, but we never seem to learn. Human nature is not our friend when it comes to successful investing. It is utterly inept.

These days the better part of my skill set is employed to remind you not to blow up your own financial plan. Indeed, it is to prevent you from doing so, which means confronting your own worst enemy… you. Some days will be very difficult. A 50% fall in markets is huge, but it will recover, not if, but when. The only measure for success with your financial planning is whether you reach your goals, not those of others. This is your story.

As for time travelling, there is a decent little series on Netflix called “The Umbrella Academy” which has some interesting ideas. Here is the trailer for the series.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

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Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

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GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

SOLOMON’S FINANCIAL PLANNING APP

Our free powerful new Finance & Tax app.
To get started download and use password – solomons

   

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.