Throughout my career creating client investment portfolios and providing investment commentary for the national press, including The Telegraph and The Sunday Times, I spent a lot of time talking to fund managers.
What struck me was that the vast majority of them are pretty bad at what they do. Many of them never outperform the market yet still are paid handsomely. Meanwhile the investment firms for which they work are happy as long as investors keep their money in the fund and pay the annual fees.
Even more troubling is the fact that the investors buying these funds mostly do so because a financial adviser has told them to. He/she in turn got paid for that dubious advice.
Yet the soul destroying thing about all this is that both fund managers and financial advisers continue to get paid as long as investors don't move their money. They therefore have little incentive to encourage you to switch into a better fund. Is it any wonder that the average investor will spend a decade in a fund even when it's doing badly?
Such practices were the reason that I left the City to further develop MoneytotheMasses.com and launch 80-20 Investor, a service dedicated to empowering DIY investors and which also spawned the aforementioned email.
The tide has turned in favour of DIY investors
There has been a huge shift of power in recent years towards those investors who want to run their own money - the so called DIY investors. The internet is democratising investing as costs fall and the ability to buy and sell funds online becomes easily available thanks to competition from fund platforms.
But people are frightened to run their own money even though they'd make a better job of choosing which funds to buy themselves. Yet the scaremongers are those who benefit most from people not running their own money - namely the financial advisers and poor performing fund managers.
The secret to truly empowering the UK's investors is to teach people how to successfully invest their own money.
The City and investment professionals do not want you to find out how easy it is to invest your own money. That's because if they reduce access to education they control people's ability to see what they are doing! That's why my jargon free email has taken the DIY investing world by storm...
The email taking DIY investors by storm
Anyone can learn to run their own money - it is not a mythical skill. In fact you can even invest your money successfully with just a few minutes effort a month. That's why I created 80-20 Investor, a DIY investment service which helps people to quickly ensure that they are invested in the best performing funds. It's based on the principle that 80% of your returns come from 20% of your efforts, so we focus on optimising that 20%.
Yet I also wanted to teach DIY investors the best investment strategies and the incredibly simple tools that the most successful professional investors use. So I set out to build a jargon free email to educate and empower DIY investors and show them how to run their own money in minutes every month. The email shows DIY investors the simple strategies & tools that successful professional investors use and don't want you to know about.
To do this I analysed the performance of thousands of professional fund managers. I talked to many of them and looked at the tools and strategies the most successful managers use, as well as the mistakes the worst performing managers made. I wanted to see what is it that makes one fund manager successful yet another one underperform?
I also researched some of the best academic papers that have been published on the topic, some of which have analysed investment markets going back as far as 100 years. It took me almost a year to distill the findings down to one email which I then chopped up into 10 short lessons, each of which takes just 2 minutes to read. It is these lessons which I use to run a live £50,000 portfolio for 80-20 Investor.
What's in the email
The email will teach you the best investment strategies and the incredibly simple tools that the most successful professional investors use, which DIY investor can now use too. The email will tell you:
- The one thing keeping investment professionals up at night
- The most important skill in fund management
- Why fund managers underperform & the 1st advantage DIY investors have over them
- What Andy Murray's career can teach you about successful investing
- The second advantage DIY investors have over professional fund managers
- The simple tool to help you beat the market
- The most important investment lesson you will ever learn (& the investing monkey)
- The investment process fund managers want to keep to themselves
- Passive or active investing - the definitive answer
- Why you should stop reading the money pages, how to build a portfolio (& how I broke Google)
Originally I only allowed a few family members and friends to receive the email, but soon more and more DIY investors wanted to read it. Before I knew it 1,000 DIY investors had read the email series. There is no catch to the short email series. They are FREE and if you don't like them you can unsubscribe at any time. You will receive one short email a day for 10 days. All I ask is that if you do decide to receive them and enjoy them then please share this article with your friends so they can read the emails too. Click here to start receiving the FREE short series of emails
Beating the market - The chart showing the lessons in action
The chart below shows the level of outperformance achieved by putting the lessons into practice (green line) since August 2014 versus the average fund manager (black line) and the market (the red line). Click the image to enlarge.