Ingram discussed research that supports his assertion and advised on what investors should do about it.
A study by JP Morgan Asset Management shows that almost every type of major asset performed better than the average unit trust investor in the US from 1999 to 2018.
In fact, over the last 20 years, the average investor will earn half the return of a balanced portfolio that has 60% in shares and 40% in bonds.
To give this more context; if you had invested $100 000 in 1999 in offshore unit trusts, it is likely you would now have $145 000 – this is below inflation!
If you had merely selected a portfolio that had 60% in shares and 40% in bonds and you kept this allocation, you would now have $275 000.
The investment industry does not work for the average investor; we need to find ways to be better than average in future.
Finding an asset mix and sticking to it is such a simple idea.
It’s straightforward to implement, but most investors find it near-impossible to stick to this strategy.
We can blame asset managers, advisors, Trump and everyone else, warned Ingram, but the reality is that we are our own worst enemies.
For more detail listen to the interview in the audio below (and scroll down for quotes from it).
It [being terrible at investing] has so much to do with emotions and very little to do with our ability to think rationally…— Warren Ingram, Personal Financial Advisor - Galileo Capital
Women tend to act slower… which means they’re better investors than men…— Warren Ingram, Personal Financial Advisor - Galileo Capital
It [investing driven by emotion] is not unique to South Africa…— Warren Ingram, Personal Financial Advisor - Galileo Capital
Get your asset mix right. Then be very cautious about changing…— Warren Ingram, Personal Financial Advisor - Galileo Capital
The message to advisors… The conversations you are having with your clients are fundamentally wrong… Spend a lot of time learning how to deal with your clients’ emotions… Understand they’re deeply fearful… Get them out of that lizard brain thinking…— Warren Ingram, Personal Financial Advisor - Galileo Capital
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