BackInvestment philosophy
The word ‘philosophy’ can make things sound heavy and hard to get through, but a philosophy can be simple.
It can be so simple in fact, that it can be summed up in a single phrase, even a hashtag, for example something like…
…which you’ll be hearing from us again, possibly more than once.
But as simple as that may be – and it’s absolutely true – it’s deceptive too. It’s really a distillation of all the experience and expertise we’ve amassed over the years in understanding how markets – and people – really work.
Risk and reward
Risk and reward, for example, it’s the age-old trade-off that’s so important in how we invest our money, yet so many of us don’t have a clear picture of how we really feel about risk, or how much we can afford to take. It’s something we’ll spend time getting to the bottom of when we put together your Metis LifePlan.
Behaviours and biases
Then there’s bias – we’re all biased, whether we realise it or not. The complex evolution of human beings has given us all sorts of quirks that help us to get through everyday life but wreak havoc with our investments.
We conducted a research paper on it in 2018 and found there are 17 different ways that your brain likes to mess with your judgement. We can’t stop them, but we can teach you how to spot them.
10 key principles
Investment philosophy is a really big subject – a quick search with a popular online bookseller that shall remain unnamed here returns more than 2,000 results. Nobody has time for that and even if you did, there’s a big difference between knowledge and information.
So what we’ve done instead is distil the key points of our own investment philosophy into 10 key things to remember.
- You can’t predict the markets
Nobody can. We’d rather spend your time and ours building an intelligent, flexible plan to keep you on track, whatever the future holds.
- You can trust the markets
While we can’t predict what will happen, one thing we do know is that the global market is reliable and holds up in the long term.
- Beware the real risk: inflation
We all know about market crashes, but what about inflation? The real risk is not growing your money enough to reach your goals.
- Trust in evidence-based investing
The evidence tells us that, mathematically, patience is rewarded. Screen out the noise and #StickWithThePlan.
- Think ahead – far ahead
When we plan, we’re planning for your life, your future, and your legacy. The ripples you create now will become waves decades from now.
- Be smart about diversification
We’ll see to it that your eggs are liberally distributed across a wide range of global baskets.
- Expect setbacks
Your investments will still have ups and downs. The important thing is to keep your emotions in check and avoid knee-jerk reactions.
- Look beyond the headlines
Market drops make great headlines, but they’re more interested in selling papers than providing accurate market updates. Learn to ignore them.
- Control the controllable
You can’t control what the markets are doing, but you can control your reaction to them and choose to #StickWithThePlan.
- Your Metis LifePlan is your benchmark
It really doesn’t matter how anybody else’s investments are doing. All that matters is your own progress towards the life you want.
