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Can Investors Get a Free Lunch?

How Making Simple Investment Choices Could Earn You a Free Meal Every Month for Life



Nobel prize laureate Harry Markowitz famously said that diversification is the only free lunch in investing.


He’s right that mixing non-correlated assets can move the risk and reward pendulum in your favour.


BUT THAT'S VERY INTANGIBLE. WHAT IF YOU COULD EARN AN ACTUAL FREE LUNCH?


A meal for two, perhaps with a glass of red wine or two?


Let's say each meal costs you £200 (because you appreciate nice meals)!


Every month.


For life.


Here’s how you can do it.


LET'S LOOK AT THE DATA


There is absolutely no academic evidence to suggest that paying an expensive fund manager to make active investment decisions on your behalf is going to give you a better investment return than putting your money into a well-diversified, low cost portfolio of tracker funds.


In fact, all of the empirical evidence suggests that your chances of investment success will actually be improved if you go for the logical, lower cost portfolio.


The former portfolio (let’s call it the “exciting” portfolio) could easily cost you in excess of 1% per annum, but let's be generous and call it 0.8% per annum.


Conversely, our clients who are invested in portfolios of well-diversified cost efficient funds (let’s call it the “sensible” portfolio) pay average fund fees of just 0.29% per annum, but, again, let's be conservative and say that you do this for 0.3% per annum.


YOU CAN SAVE YOURSELF A LOT OF MONEY


Now let's say that you've got a portfolio of £500,000.


The exciting portfolio will cost you £4,000 pounds per annum in fund management expenses.


The sensible portfolio will cost you £1,500 pounds per annum in fund management expenses.


That's a saving of £2,500 per annum, more than enough money for your monthly treat.


SO, WHO ARE YOU GOING TO TREAT EVERY MONTH?


Will you carry on paying your fund manager their high fee so that they can continue on dining out at your expense?


Or, will you make simple changes today and use the savings to treat someone you love to that meal, every month, for the rest of your life, with zero detriment to your financial position.


So, what’s it to be?

To make a reservation for your free lunch, or just to take the first step towards saving yourself substantial amounts of money, please give us a call on 020 3488 9505.



The value of your investments can go down as well as up, so you could get back less

than you invested.

Tax and Estate planning is not regulated by the Financial Conduct Authority.


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