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How to Avoid 99.99% of Investment Funds

Updated: Jul 10, 2023

How Carefully Choosing Your Investment Story Can Save You Time, Money and Mental Energy



Globally, there are over 138,000 different funds that people can invest in. To put that into context, that’s about three times the number of product lines that you’ll find in a large supermarket.

There’s an investment product for every investment story. If you want to invest in space technology, there’s a fund for that. Emerging markets smaller companies? There are plenty of options.

There’s even one that used to be called the Vice Fund, with a focus on what are considered to be socially irresponsible companies!

As there will never be a shortage of people trying to sell you their investment strategy, your financial success depends on learning to recognise those stories that align with your own values and having the confidence to ignore the others.

HOW DO YOU FEEL ABOUT THIS STORY?

Imagine that your portfolio contains over 10,000 different holdings, giving you significant diversification across UK and overseas markets. It contains a mixture of equities and bonds to suit your risk and reward expectations and because it gets automatically rebalanced on a regular basis, your asset allocation will never drift too far from your target.

And the icing on the cake is that your portfolio’s charges are comfortably less than half of what the average investor pays, thus allowing you to keep more of the returns that “the markets” generate for you.

If that story sounds good to you, you can currently invest in it through just one or two popular funds.

MANAGING FEAR AND GREED

The most important investment story of all is the age-old tale of fear and greed.

If you are too exuberant in the good times, or overly despondent when markets are going against you, this is unlikely to result in a healthy investment journey.

But if you can be disciplined in walking an unemotional path between the two, you’ll give yourself the best chance of investment success.

With investing, some things you can control, others you can't. You can’t control the stock market or the economy or politicians or future events. But you can control your costs, your diversification and your portfolio structure.

And if you believe in your investment story, you are likely to stick with it through thick and thin on your journey to financial success. You’ll be able to ignore 99.99% of the available funds out there and avoid costly detours along the way.


To learn more about common-sense investing, click here.



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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