The traditional financial services industry (embodied by the giant Wall Street firms) is not about service.
Wall Street can often feel like a sales machine, focused primarily on making money for itself by pushing actively-managed financial products with high fees that don’t necessarily serve the client’s best interests—or help them achieve their long-term goals.
Fortunately, there is a better way to invest. You can adopt an investment philosophy that’s based on logic, data and evidence to put the odds of financial success on your side.
Thanks to smart academic researchers, we now understand where value comes from in the global financial markets (and where it doesn’t), and can put those findings to work in portfolios that offer exposure to the real drivers of long-term performance. In other words, investors can rely on science, not sales pitches and guesswork.
While the science is clear, our emotions are complicated. Human nature abhors change, and there is a lot of inertia behind investing behavior—whether we think we have to invest the way our parents and grandparents did or are still hanging on to old notions that “expert” stock pickers have the secret to long-term success. But at some point, you have to understand that evolving to evidence-based investing is not giving up control over your future—you’re actually taking control by accepting the science and embracing the course it lays out for us.
Even with academic evidence on your side, the world is unpredictable. Investment returns will fluctuate over time—sometimes painfully (remember 2008?). But typically you get rewarded precisely for taking the right kind of risk.
The key to long-term success is not just embracing an evidence-based investment strategy but staying disciplined and sticking with your plan in the face of short-term uncertainty. If you can’t do it on your own, you can work with someone who helps you stay disciplined. Remember, we’re playing the long game, and investors who are disciplined in the face of short-term chaos are the ones who are most likely to achieve their long-term goals.
Evidence-based investing improves your chances of better investment returns, but the greatest return of all is the freedom you gain. Reducing the time you spend obsessing over your investments or worrying about what’s going to happen to the markets tomorrow means you have more time to focus on what really matters to you—all those important things you’re saving and investing for in the first place.
In fact, some people feel they have gained 6 weeks of their life back per year by not watching CNBC and not reading newspapers highlighting the next hot stock. It’s liberating.
We hope these top 5 takeaways have helped you understand a little more about why Matt Hall wrote his book and what we believe everyone can gain when they embrace a rational, understandable investment approach.
Thanks for taking the long view.
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We want to change as many lives as we can, and Odds On has made that journey simpler and faster. All net proceeds from sales of Odds On go to charity.