Better Investment Decisions Should Be Everybody's Beeswax

Sidestepping the market ‘sirens’ on a lifelong journey to financial wellbeing.

- Paul Nixon

Journeys are part of the human condition. We possess an almost paradoxical nature of resisting change while simultaneously longing for new experiences. All the preparation in the world, however, cannot take away the inherent uncertainty and risk that exist in these journeys and they often, when recounted, can provide readers with many enthralling tales and opportunities to learn. The tale of Odysseus’ journey back to Ithaca is one that has many parallels to the way that clients, advisers, and investment managers make investment decisions.

Like travellers, investors bear a similar disposition and face similar challenges. They sacrifice consumption today in the hope of being rewarded over time for braving sometimes very turbulent market waters. This inherent uncertainty, however, is often enough to either keep us from jumping in – thus forgoing the returns we need by investing over time – or, alternatively, jumping ship mid-journey to what appears to be a better-equipped vessel to get us where we’re headed. This behaviour applies to all parts of the advice chain and these behaviours can have a significant cost on the outcome achieved by the client.

The Covid-19 global pandemic and its extreme impact on the financial markets has focused attention on these behaviours of late.