The best and worst of times to be an investor

Posted by TEBI on April 30, 2024

The best and worst of times to be an investor



“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness…”

Charles Dickens, A Tale of two Cities


These are strange times we are living in. We have technology and resources at our disposal and enjoy a level of wealth today that our ancestors could only have marvelled at. And yet we seem to be facing ever more problems, whether it’s inflation, climate change, political divisions or international tensions. It’s a good time to be alive on so many levels, and a bad time on others. The same could be said about being an investor.

It’s so much easier to invest nowadays than it was for our parents and grandparents. Today’s investors have far more options open to us than they did, and investing is also rather cheaper, relatively speaking, than it was for them. But does that mean that today’s investors are achieving better outcomes? You’ve guessed it: no, it doesn’t.

ROBIN POWELL has been talking to JOE WIGGINS about why that is — and what you can do about it. Joe is an expert in behavioural finance and the author of a new book called The Intelligent Fund Investor.


RP: Joe, is now a good time or a bad time be an investor?

JW: I would say that it’s both a great time to be an investor and a terrible time to be an investor. Let me explain that. It’s a great time to be an investor because we’ve got a huge array of choice. We’ve got far lower fees. It’s easy and convenient to build a sensibly diversified, low-cost portfolio that can deliver good returns over the long run. That’s been a huge development in the industry, and it’s a major benefit for investors.

Why is it the worst time? Because, behaviourally, we’ve got so much more stimulation and so much more choice. We’ve got market news all around us. We’ve got access to, and control over, our investments. So the ability to see a news headline that we don’t like and then react by making a poor decision on our smartphone when we trade in our portfolio is like never before. So it’s much more challenging to make good long-term investment decisions and stick to them, even though from a cost perspective and a diversification perspective, it’s a great time to be an investor.




If you’re interested in investor behaviour, here are some more articles you might want to read:

Stop looking for shortcuts

Six lessons for investors from Daniel Kahneman

Learn to embrace uncertainty



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© The Evidence-Based Investor MMXXIV


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