The Evidence-Based Investor

My story: Wall Street & the City via Gitmo & Baghdad

Posted by Robin Powell on August 29, 2017

It’s weird. As a journalist, I’ve spent my career interviewing people, but it’s oddly disconcerting when the boot is on the other foot!

I just gave an interview to an advice firm in Dubai in which I explained my transition from general TV news hack, covering stories from Britain and around the world, to what I do now now; I also gave my thoughts on how far we’ve come in demystifying investing and making the industry more transparent; and I outlined my hopes for the future.

Here are the highlights:

 

Why I started blogging

“I was amazed that there was all this information out there about how to invest — and yet the vast majority of investors invest in a way that has no basis whatsoever in academic evidence.”

 

Active management as a news story

“As a journalist, this is in many ways the biggest story of all – how a hugely powerful and lucrative industry is acting in its own interests to the detriment of hundreds of millions of investors around the world.”

 

Biting the hand that feeds

“I have huge admiration for fellow journalists who have explained the problems with active management – and who are steering investors in the right direction. It often involves the journalist effectively having to bite the hand that feeds them!”

 

The power of incentives

“All human beings are incentivised to act in a certain way, and when faced with evidence that conflicts with what we think are our best interests, we often either ignore it, or we strive extra hard to counter it.”

 

The lesson every investor has to learn

“It simply isn’t necessary to beat the market. If you are patient enough, market returns are actually remarkably generous. All the investor needs to do is capture near enough the market return – and they will be just fine.”

 

The importance of cost

“With almost everything else we buy, we tend to get a better product the more we pay for it. But the less you pay to invest, the more you get to keep for yourself. That is a counter-intuitive message, and people find it very difficult to understand.”

 

The importance of investor education

“We are bombarded on a daily basis by myths from the industry – both myths about indexing, and myths about active management and what you can expect it to achieve. Advisers need to be telling investors how it really works.” 

 

The Transparency Task Force

“The industry is fighting tooth and nail to hide the full extent of fees and charges . The Task Force is (helping) to give consumers a much clearer picture about what they are paying, and what kind of value they are receiving in return.”

 

The value of advice

“Not everyone needs a financial adviser – at least not all of the time – but there is no one who wouldn’t benefit from good financial advice. The adviser is potentially the most important link in the value chain.”

 

You can read the full interview here:

Secrets of a self-interested industry laid bare: an enlightening interview with The Evidence-Based Investor

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Robin Powell

A journalist and broadcaster, Robin Powell is a campaigner for positive change in the investing industry. He runs a communications company for the evidence-based investing sector called Regis Media.

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