Most people don’t know it
Most people don’t know it
When I spend time with someone like Joel Fleming from UBS Asset Management, as I did while filming our latest TV show, due out in October, I realise just how many ways there are to invest in the world.
Joel manages a microcap fund and tells some fascinating stories of small companies with big ideas. He needs to have his finger on the pulse as it’s his job is to find the right idea and invest before the rest of the world figures out it’s a great investment.
As someone who runs their own business, I can appreciate how interesting it must be to identify good ideas, and even better management teams, to make it in the long term.
It’s not a mainstream asset class, and the fund Joel runs has limited capacity to take investments. It must, by its nature, remain small enough to truly capitalise on performance.
When I explain the concept of microcaps to my friends, most of them become enthusiastic. They can appreciate the nature of the investment.
Interestingly enough however, they’re also curious about fixed income, ETFs and global investing, which makes me realise that most people don’t even understand their full options when looking at investments.
Now, many would say that you don’t need to be an expert to hold a good investment portfolio. That it’s the job of the adviser, and the fund manager to look after this.
But I believe you will never truly get the most out of your investment strategy, until you at least have a rudimentary understanding of asset classes, diversification, and portfolio construction. I say this because I know if you understand what you’re buying, you’re far more likely to make better long-term decisions, and avoid the state of low level worry so many people go through when it comes to making money decisions.
As more and more of us start to inherit money, usually from property that has increased in value astronomically, you’ll need to up-skill your understanding of the investment landscape. This is a crucial time to talk to an adviser, but equally crucial is the need to self-educate. This will allow you to ask better questions, make better decisions and work with an adviser, rather than outsourcing everything with no understanding of what you’re buying.
Education is everyone’s responsibility. We are happy to be part of the solution.
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