Some may be aware that the girls and I have been moving house over the last few weeks.
Whilst most of sane mind do it in a day or two and without much drama we decided to buy a house untouched since Lincoln was President (I kid you not), take a year renovating it and then move in a month before it was finished, genius at every turn.
Having over the recent past experienced parts one and two of the three least pleasant of things (loss of a parent and divorce), I have now achieved the grand slam, the trinity of the stressful all present and incorrect sir.
Whilst the unravelling of my patience and sanity are amusing it’s unworthy of a blog. So the finance related reason for putting finger to pad is to draw the comparison between choosing investments and moving house.
Both if done diligently require research and planning.
Both when entered into have a positive hoped-for outcome.
Both offer multiple options from which to choose.
Both require the expenditure of large amounts of money.
Both can go agonisingly wrong.
I listened to a very successful fund manager many years ago who said, bold as brass I thought, that he only expected about 65% of his investments to be successful.
I was genuinely flummoxed “but that’s only just better than guessing, he’s rubbish” but I was dumb and wrong.
I have subsequently heard and read others say the same thing and their rationale is that their big winners will achieve gains of 100-500% (maybe more), their worst losers can only go down 100% and that’s in bankruptcy with no creditor pay-out (a rare thing usually caused by fraud).
Of course the difference between moving house and choosing investments is that a house is a single investment, not a spread portfolio but fundamentally it’s the same.
If you are lucky about 65% of the stuff you buy is delivered undamaged, with all the bits, on time or at all.
About 65% of the people that you arrange to do things actually turn up, know what they’re doing, achieve a successful outcome, don’t break or damage something.
About 65% of your children are unhelpful, annoy you or just get in the way.
About 65% of your will to live deserts you.
But even with the failures, the cock ups and the setbacks, it’s the laughs, excitement and sounds of the junior monkeys enjoying their new cage that make it a successful investment, in fact a priceless one.
NOTE: This is written in a personal capacity and reflects the view of the author. It does not necessarily reflect the view of LWM Consultants. The post has been checked and approved to ensure that it is both accurate and not misleading. However, this is a blog and the reader should accept that by its very nature many of the points are subjective and opinions of the author. This is not a recommendation to buy any product or service including any share or fund mentioned. Individuals wishing to buy any product or service as a result of this blog must seek advice or carry out their own research before making any decision, the author will not be held liable for decisions made as a result of this blog (particularly where no advice has been sought). Investors should also note that past performance is not a guide to future performance and investments can fall as well as rise.