A dying banker’s last wish

We have recently published the second edition of our whitepaper “The Investment Illusion”. We owe thanks to many of you who have given us suggestions and we have continued to look for material and input ourselves to make our story stronger, simpler and shorter. Whilst doing so we came across an excellent book called “The Investment Answer” which conveys many of the same messages that we published in our original edition. (See www.theinvestmentanswerbook.com). In this book the authors, Daniel Goldie and Gordon Murray, used an interesting concept which they called ‘the emotional cycle of investing’, to illustrate why so many of us have a hard time sticking to the discipline that is needed to achieve long term investment success. We asked them if we could use this concept in our second edition. Only later and by coincidence did we come across a New York Times article titled “A Dying Banker’s Last Instructions” about the authors and the book. It is an intriguing article that sheds some light on why they so happily agreed to us using their concept, which we do on page 18 of the Investment Illusion. The article can be found here. For us the story of mister Murray was inspirational. What we try to do sometimes seems so obvious and simple, but the article shows once again that even (or maybe especially) people who work on Wall Street can have a spectacular 25 year career without learning the simple truths that lead to long term investment success:

1.Control your emotions by having the discipline to stick with your investment plan at all times2.Minimize costs3.Manage risks through diversification and allocating assets across asset classes

As mister Goldie and Murray confirm, following these simple truths makes investing simple, but not easy. Indeed it is easier to stay under the spell of the Investment Illusion and succumb to the activity that is urged upon you by the industry. We still have a lot of work to do! Kind regards and happy holidays, Marius and Jolmer