Global View Investment Blog

We Need Your Advice to Solve a Mystery

The more we realize that we are not perfect and have much to learn from our clients, we ask ourselves what it would be like if we knew exactly what our clients need.

With this in mind, we will be asking (more directly and more frequently) for YOUR advice going forward.

Investors in the investor class of the world’s largest equity fund made 3.2% per year (end of June). And yet investment experts tell us that markets are "efficient." If they were "efficient" (and people acted "rationally") then investors’ returns would match the returns of the investments they own (at least most of the time). But they don’t. The world’s largest equity fund made 5.4% over the same period.

The question is, WHY do investors’ returns lag so much?

I need your advice on how we can solve this mystery. Why do investors do so poorly? This advice will be compiled into a book I am writing.

Before we start, let’s review some key facts:

  1. Investment "experts" teach us that markets are efficient
  2. This leads experts to invest in indexes, and for investment managers to invest like indexes
  3. This has not worked well for investors (who run from risk and chase returns)
  4. And it has created opportunities for unscrupulous insurance salesman to transfer investors’ potential returns to them (cheating them so much a new rule will make it illegal in retirement accounts)

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Ken Moore

Written by Ken Moore

Ken’s focus is on investment strategy, research and analysis as well as financial planning strategy. Ken plays the lead role of our team identifying investments that fit the philosophy of the Global View approach. He is a strict adherent to Margin of Safety investment principles and has a strong belief in the power of business cycles. On a personal note, Ken was born in 1964 in Lexington Virginia, has been married since 1991. Immediately before locating to Greenville in 1997, Ken lived in New York City.

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