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May 10, 2021

Finding a Good Investment Guru


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With so much going on in stockmarkets it’s impossible for a novice investor to decide on whether they should stay in or sell out. Of course, this brings a further question – when do you get back in once you have sold out. These questions come more to the fore when the financial media becomes obsessed with market movements and reports on them. Finding a good investment guru may be needed, but does such an individual exist? Strangely enough while Covid and the current HSE ransomware situation has drawn our attention stock market reporting has been the least of our problems. But then at this time of the year, there’s the old adage of “Sell in May and Go Away” So what’s an investor to do?

Finding that Guru

As someone who makes his living from giving financial advice I suppose that I should be happy. Enquiring minds usually lead to enquiring new clients but what is it that drives this search to find a good investment guru, even though anyone with any experience of stock markets knows that predicting them is impossible. Finding someone who can continually predict in a manner to generate serious financial gain for clients is even more impossible. But if recent press coverage is anything to go by, instead of an investment guru they are more likely to get sucked into either Ponzi Schemes or high risk geared investments that will deplete rather than grow their financial capital.

What makes a good Investment Guru?

In truth, a good investment guru will tell it as it is – time, not timing and a zero gearing as well as a diversified investment portfolio is the key to growing sustainable and balanced risk investments. Yet this is not really attractive to many people especially those that covet another person’s perceived wealth.  People, it seems, have a need to be dazzled by someone who is always in the media and has a high public profile. There have, unfortunately, also been countless failures of high-profile gurus both in Ireland and internationally. In many cases, it is a case of “where are they now?” This approach is not just confined to money, we look for it in other areas of life as well. Modern communication has made us more susceptible to the charms of celebrity.

Yet predicting investment returns is akin to make weather forecasts. While you might get a sense of what might happen over the next few days, further out is totally impossible. And even over the short term the real experience can be totally random on any given day.

Thinking like a good Investor

There is a saying in investment circles of “no-one rings a bell when you hit the bottom of the market”, meaning that nobody knows when the bottom of the market has been reached and investment values will move upwards from that point in time. The nearest one can get to “calling the market” is to decide for how long you want to invest, figure out what rate of return you need, construct a portfolio to get this return, invest accordingly and wait for the appropriate period. Success in investing does not come overnight. For those that have got good short-term returns, they just got lucky. Sometimes in the short term you might be in the right place at the right time. Even Warren Buffet has had his share of failures, but the real secret of his success lies in the fact that he had time, bought on value and stayed invested. But don’t fool yourself to think that there is a budding genius out there who will call markets right. Finding a good investment Guru is the wrong starting point, they don’t exist!

The best approach is to focus on you, your goals, the rate of return you need and structure your portfolio accordingly. It’s just that simple.

May 10, 2021
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