The Tortoise and the Hare – An Investing Review of Stamina and Stomach


Recently, I was talking to a client who called me “turtle” and to be honest, I was taken back. I never thought that I would be slow and fanatical. I can imagine that 99% of the people who work with me or know me would agree with me. As he continued to talk with me, I got what Steven Covey (author of “Seven Habits of Highly Effective People”) called the “A-HA moment”, where confusing things suddenly became clear time.

I always interpret my investment method as “straight-line investment”, which means that if the goal is growth, the goal is to make the customer’s money grow steadily over time, or if the goal is the principal, then keep the principal unchanged. Monthly interest continues to grow. income. On the contrary, the method of stock market investment aims to provide ultimately higher returns for those with endurance and appetite. I am not in the business of stocks, bonds and mutual funds. I don’t have a license. I am not an anti-market person-in fact, I have some own funds in the “market”. I work in the field of “safe currency products”-in the field of safe currency products, the main security is the main goal, and funds have never been invested in any stock or bond positions.

New customers (potential customers) often ask me what I think is better in today’s turbulent world of low interest rates. The truth is, I can’t say for sure. The truth is that no one can do it. This is a personal decision that every investor needs to make on his own. Over the years, in the turbulent market, I have won many customers. When the market is booming, I would rather discuss with the prospects. My philosophy is that it is unhealthy to make decisions about markets or safe investments during turbulent times-because many times these decisions are made out of fear rather than out of confidence in the planning process. When the market is turbulent, I hear radio waves full of “doomsday predictions”-this is not an ethical way of marketing, and “marketing ethics” is a discussion in another article.

Some simple research shows that the S&P 500 Index (a well-known benchmark for the performance of the general stock market) has an average return of 6.48% over a decade (as of 1/31/16). The expenditure results related to the investment market do not belong to this figure. The cost of asset management (fees) is still the focus of debate in the financial world, but even if we set our sights on one of the lowest management costs in the industry-Vanguard, the 10-year performance of its S&P 500 Index Fund (VFINX) is still very good. Not bad. 6.36%.

Our ten-year investment model utilizes a variety of secure currency products, which are comparable to the above figures. However, if you look at the 3-year and 5-year S&P 500 yields, they perform a few percentage points higher than our model. Treating the past as a challenge for future performance is like “chasing a dog to the tail.” The decision to invest in the market and safe investment depends more on the comfort of the individual (or institution) on the ride. The following two charts are a very simple example. They illustrate that the end points of safe currency (principal protection) investment and market investment are very similar over the past 10 years.

One (turtle) is the “safe currency” program-slow and stable-“straight line”-nothing fancy. The second is the market (hare)-a frenzy with great ups and downs-frustrations.

Ultimately, the decision of where to invest depends on the investor’s propensity to risk or avoid risk. It is impossible to predict future trends in the market or interest rate trends. Compared with other safe currency products (such as traditional bank and insurance company products), I will continue to look for opportunities for my customers to provide major protection and competitive returns.