Keep it Simple

Some of the best advice I have ever heard was also the simplest. In a competitive world, it is easy to get wrapped up looking for ever more sophisticated ways to gain an edge. Yet keeping things simple is one of the most underrated aspects of doing something well. It applies to any endeavor whether it is investment, business, sport, or life.

From an investment perspective, I see it all the time. Investors who are easily distracted by every shiny new opportunity often don’t know their true objective or achieve the results they want. When you really know what you are doing, you do not lose focus. It comes back to having a robust understanding of your investment criteria and being disciplined on the fundamentals.

Warren Buffett is the world's greatest investor, yet his investment portfolio remains remarkably simple. His portfolio is invested in shares, cash, and bonds. He does the fundamentals exceptionally well and has done since 1956 when he started his first investment partnership. Today his investment vehicle, Berkshire Hathaway, is valued at almost $US1 trillion. His methodology is simple. He buys great businesses at fair prices and holds them for the long term.

I am always perplexed and slightly amused when I see the range of exotic investments that many large investment firms have wealthy families pour money into in the chase for better returns. I think that might be more about marketing and fees than returns.?As a long-term investor, the best thing you can do is simply master the basics. When you have done that, you can be patient and trust the process you have in place.

To succeed in whatever you are doing, you do not need?exotic or risky strategies. Understanding the fundamentals and then mastering?them will provide the foundations for success. As Bruce Lee once famously said “I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times”. In other words, it is far more powerful to have focused on mastering one thing than it is to have tried everything. As a long-term investor, the best thing you can do is keep it simple.?

General Advice Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.