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Rip Van Winkle – The Perfect Investor

by | Nov 3, 2017 | AHEAD OF THE CURVE |

Are you familiar with the story of Rip Van Winkle? Here’s a very quick summary:

One autumn day, to escape his wife’s nagging, Rip Van Winkle wanders into the mountains with his dog, Wolf. Hearing his name called out, Van Winkle sees a man wearing antiquated Dutch clothing; he is carrying a keg up the mountain and requires help. Together, the men and Wolf proceed to a hollow where Rip meets more men who are silent and dressed strangely. Rip starts to drink some of their intoxicating liquor and he soon falls asleep.

 When he awakens on the mountain, Van Winkle discovers shocking changes: his musket is rotting and rusty, his beard is a foot long, and his dog is nowhere to be found. He returns to his village, where he recognizes no one. It soon becomes apparent that Rip has been sleeping for more than 20 years!

Source: Wikipedia

So how has the story of Rip Van Winkle made it into a Financial Planning Blog? Because he is the quintessential perfect investor! Let me explain.

As Ireland Inc continues to recover from the dark days of the recession, there is more and more investment opportunities arising. It seems that some of the harsh lessons of the recent past have been forgotten by some investors. We are inundated with the next best thing for investors – a new property fund, a “guaranteed” return, a brand new fund ….. the list seems endless.

While there is no doubt some of these opportunities will yield great returns, we are always sceptical whether these returns are down to luck or skill. We believe that when it comes to investing, we should all be Rip Van Winkle. You should establish a long-term financial plan, invest according to the needs of your Financial Plan and then “Stick With The Plan”.

As we cannot predict the future (by the way nobody can), we are advocates of Evidenced Based Investing. Our recommendations are based around academic research, long term market history and practical applications. We never propose the next best thing.

I have absolutely no doubt that those investors with a long-term plan that is diversified, tax efficient and cost efficient will outperform investors who fail to address one of these key areas.

What if we met Rip before his foray into the mountains? Having presented his very own Cash Flow Plan, we would have implemented his long-term financial plan. Rip Van Winkle would be one very satisfied investor when he awoke from his slumber. The short- term noise and the temptations of the great “guaranteed” returns would be irrelevant to Rip.

We help our valued clients to behave in a Rip Van Winklesque (this is a new adjective created by Metis Ireland!) fashion with their investment strategies. In short, the long-term investors always win. Don’t be tempted into looking for quick wins or short cuts. It doesn’t work. Trust me, I’m talking from experience.

Carl Widger
Co-Founder & Director

Disclaimer

Metis Ireland Financial Planning Ltd t/a Metis Ireland is regulated by the Central Bank of Ireland.

All content provided in these blog posts is intended for information purposes only and should not be interpreted as financial advice. You should always engage the services of a fully qualified independent financial adviser before entering any financial contract. Metis Ireland Financial Planning Ltd t/a Metis Ireland will not be held responsible for any actions taken as a result of reading these blog posts