Learning from history
The past 25 years have provided a few lessons when it comes to investing, which could have helped today’s investors avoid massive losses during the recent market volatility and high profile collapses, according to Vanguard Group chief executive and chairman Jack Brennan.
With a 25-year history at Vanguard himself, Brennan said knowing what you own, why you own it and being comfortable with what you own were the key lessons to be taken from any major bubble or scandal.
“A simple rule of thumb to consider when investing is: if you can’t see it, can’t understand it, or can’t explain the reason for owning it, it probably shouldn’t be part of your portfolio,” he explained.
“Many of the most successful and most sophisticated investors follow this advice.”
Brennan added that a wise approach involved a balanced investment strategy, high quality and discipline, explaining that there would always be a ‘sure bet’, but that the best precaution was a little bit of scepticism.
“Recent high profile collapses demonstrate that investing in the ‘next big thing’ is not a certainty,” he said.
Recommended for you
AZ NGA has entered into a strategic partnership with national advice firm MiQ Private Wealth, as a way to provide a succession solution, as well as career development opportunities for staff.
While the advice profession struggles under growing operating costs, Adviser Ratings has found more than half of practices – some 58 per cent – that generate less than $250,000 in revenue report no profit at all.
The Federal Court has ordered the freezing of assets and the appointment of receivers to two entities linked to Australian Fiduciaries, ASIC’s latest move in an ongoing investigation into the company’s managed investment schemes.
Off the back of the August adviser exam results, the profession has seen 17 new entrants hit the Financial Adviser Register (FAR) this week, helping numbers return to positive territory.
