This is such an exciting moment for me — the start of my very first post for the RockWealth blog, having just joined Tim, Matt, Mark and the team as Head of Investor Education. It’s a huge honour to be here.
You may already be familiar with me from the documentary that my company, Ember Regis Group, recently made for RockWealth — Investing: The Evidence. But perhaps I should start by introducing myself.
I’m a journalist. I worked for more than 20 years in broadcast television news and current affairs, mainly with ITV, but also with the BBC and Sky News. Though I was mainly based in the UK, my career has taken me all round the world, from the war in the former Yugoslavia, to Iraq under Saddam Hussain, to Guantanamo Bay (though thankfully not as an inmate).
So, you might ask, what is a journalist doing working with a financial planning firm? Well, it all began six years ago, when I was asked by a wealth management company in the Midlands to produce a documentary about investing. The film wasn’t a promotional film. It wasn’t intended to make the firm that commissioned it a massive profit. The aim was simply to present to the wider public the academic evidence about the best way to invest.
In making that documentary, I read and travelled widely, and had the pleasure of meeting some of the biggest names in the financial world, including the index fund pioneer Jack Bogle, David Booth, the founder of Dimensional Fund Advisors, and William Sharpe, the Nobel Prize-winning economist.
It was an assignment that changed my life. I was astonished to find that, despite there being a welter of peer-reviewed evidence dating back to the 1950s about what works, and what doesn’t work, the vast majority of investors around the world are doing it wrong. Worse than that — they’re being positively encouraged by financial professionals and the financial media to act in ways that will make it less rather than more likely that they will achieve their financial goals.
To cut a long story short, we made a follow-up documentary called How to Win the Loser’s Game, and I then started a blog called The Evidence-Based Investor. We’ve since made another documentary, for a US audience, called Index Funds: The 12-Step Recovery Program for Active Investors, and we’re currently discussing a similar film for Australian investors.
I would encourage you, if you haven’t done already, to watch Investing: The Evidence. What does the documentary say? In a nutshell, it says that, to maximise your chances of a successful investment experience, you should invest for the very long term, in a broadly diversified portfolio of low-cost index funds, and that, apart from occasionally rebalancing your portfolio to restore the original asset allocation, you should leave it exactly as it is. It really is that simple.
Unfortunately, though, just because the rules of successful investing are simple, that doesn’t mean that it’s always easy. The problem is that we’re only human. It’s hard when seeing friends or neighbours apparently prospering form a particular investment strategy to resist the temptation to copy them. It can be even harder to stay calm and rational when markets are falling sharply and everyone else is taking fright.
It’s because investing isn’t easy that everyone can benefit from having a financial plan that they can stick to and, just as important, from having a good financial planner — an objective guide with their very best interests at heart, to keep them on track.
It’s very gratifying to hear, as I regularly do, from people who have benefited from the evidence-based approach to investing as a result of reading my blog. In the years to come, they will save themselves a small fortune and, I hope, will have much more peace of mind about their financial future as a result.
That’s also why I’m so excited to be working with a first-class financial planning firm like RockWealth, that bases everything it does on rigorous, independent evidence and for whom the most important thing is what is best for its clients. It’s a firm whose values I totally identify with.
On a personal level, too, I’m pleased that working with RockWealth means spending more time in the Cotswolds. It’s an area that I feel very attached to — I was married and used to live here — and it’s also one of the most beautiful parts of the country.
In more ways than one, it really does feel like coming home.