Friday 2 May 2014

Back Yourself! Take Charge of Your Own Investments

If I think back to all the advice I've had from 'professionals' over the last twenty years the 
worst has to have come from financial advisers - in every guise - it has quite simply been 
appalling: biased, ignorant and sometimes downright dishonest. And in my case this 
ranges from one of the more exclusive private banks to several so called 'independent' financial advisors.

One of my better decisions (there haven't been that many) was made about three years ago when I decided to take 
charge of my own investments.

It was prompted by reading an excellent book by Professor John Kay, The Long and The Short of it: A Guide to 
Finance For Normally Intelligent People Who Aren't In The Industry
This book highlighted the madness of investing with so many of the funds who work so hard to convince you that they are going to do better with your money than you ever could and you are far better off leaving it to the 'experts'. 
Yeah right, experts who never outperform the market over the long term and who charge you a fortune in fees for the privilege.

There is no more unscrupulous form of marketing than that of these investment 
companies: they use historical performance data in the most questionable manner, hide the real fees 
(Total Expense Ratio) and cover themselves with a veneer of respectability, when the 
reality is they are seriously dodgy.

John Kay's book led me to read another book, The Financial Times 

Guide to Exchange Traded Funds and Index Funds: How to use tracker funds in your 
portfolio, which I found useful as a practical, 'how to' guide. For three years now I've been 
successfully running my own investments and I've generated more income and gains in 
those three years than I did in the last twenty years with the 'experts'. Now don't mistake 
this for hubris on my part. 

I'm not daft, I know financial markets can crash and things can go pear shaped but look at 
it this way, whatever happens, I'm not paying their exorbitant fees and 
I'm not rewarding someone even when my investments go down and I'm not constantly 
trading, 'or churning', as so many funds do to make commissions - what I've done is 
definitely not rocket science but I'm in charge and I know I'm not being ripped off.

You might be sensing by now that I feel pretty strongly about this, and you're right, I do. 
My biggest regret is I didn't make this move many years ago and I foolishly went on 
believing that these people know what they're doing. THEY DON'T! 

So I implore you, rise up and take charge of your own investments, you can't do worse than the experts and 
simply by avoiding their big fees, you will be doing a whole let better.

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