Investment Plans and Rain Delays

22nd November 2016

The reason our ideas haven’t spread faster is they’re too simple” – Charlie Munger, Vice Chairman of Berkshire Hathaway.

Investment philosophies can be as simple or complex as investors want them to be. Many investors believe that the more complex the structure or plan, the more valuable it must be. History is full of examples proving this belief to be wrong. Unfortunately, financial institutions are well aware of these investor beliefs so they have marketed complex products and services. Maybe they will work or maybe they will not. Either way, investments typically do not move in one direction all the time. During those down periods, it is difficult to stick with complex plans or investments that are not easily understood. That is asking for trouble. The more complicated the process, the less effective it can become.

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