Follow your own path

Posted by TEBI on September 29, 2020

Follow your own path



There once were two hikers. The first, Michael, wanted to do everything by the guidebook. If the book said to take one particular road because it was shorter, he would do so. If the book said the best place to camp was by a certain clump of trees, he would obey.

The second hiker, Maria, was content to follow her own course. Yes, Michael’s suggest route might be shorter, but she was content to take the long track around the lake because of the views. Yes, the camping spot was popular but she preferred a private spot in the valley.

Michael also convinced himself he was a thrill-seeker, aping the guidebook’s suggestion of a hair-raising climb over a rocky range. Maria, meanwhile, stuck to her instincts and chose a more sedate track, allowing her to spend more time looking at birds instead of watching her feet.




The right way to go

Investment can be a bit like this long-distance walk. Some people think they have to do everything according to the guidebook, sticking to routes they might otherwise not choose for themselves or taking on risks they might not feel entirely comfortable with.

A wise financial planner will tell you, however, that the best route is the one which gives you the best chance of getting to your destination safely. It might not be the plan that everyone would prefer to adopt. But that is the nature of people. We are all different.

For instance, you may prefer not to increase your exposure to riskier stocks, even though the expected return may be greater. Instead, you may load up your portfolio with more low-risk government bonds. Like Maria, safety means more to you than the thrill of the alternative.

The point about investment portfolios, like hiking routes, is there is not one perfect way. It will depend on each person’s goals, timetable, appetite for risk and what they value.

Ultimately, you should follow your own path.


Did you find this analogy helpful? Here are some more:

Playing as a team

A club for every shot

Riding out the market turbulence

A tool to get you to your financial destination

Saving money with the cappuccino strategy

From little things, big things grow

Shift your focus away from passing showers

It’s not over till it’s over

The all-roads vehicle of investing


Content such as this would not be possible without the support of our strategic partners, to whom we are very grateful.
We have three partners in the UK:
Bloomsbury Wealth, a London-based financial planning firm;
Sparrows Capital, which manages assets for family offices and institutions and also provides model portfolios to advice firms; and
OpenMoney, which offers access to financial advice and low-cost portfolios  to ordinary investors.
We also have a strategic partner in Ireland:
PFP Financial Services, a financial planning firm in Dublin.
We are currently seeking strategic partnerships in North America and Australasia with firms that share our evidence-based and client-focused philosophy. If you’re interested in finding out more, do get in touch.


Did you know, TEBI can now put readers in touch with financial advisers in their area who share our evidence-based investment philosophy and our mission to improve investor outcomes?
In our view, investors’ interests are best served by working with a good financial adviser.
If you’d like to find an adviser who is suitable, simply complete our short questionnaire and we’ll get back in touch with you. 


© The Evidence-Based Investor MMXX



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