Page 15 - DIY Magazine June 2018

sectors; it then top slices the best performing funds in each sector, and finally puts the sectors into groups according to their volatility. This information is produced weekly in numerical and graph form.
We are looking for the Usain Bolt’s of the fund world,
not the guys at the back of the race; it is obviously more complicated than this, but this is the basis of the system. I feel that the financial markets should be demystified; the Saltydog team is on a mission to empower retirees and all lay investors, young and older to take control
of their finances. The homework has been done and
the findings are there on a silver platter. The trick
is consistency, regular monitoring and then action; switching funds as and when necessary.
The rise of the internet has enabled cheap trading
via many online fund supermarket platforms; the combination of these platforms and access to accurate current information has the potential to revolutionise investing.
It can be likened to a relay race. When a sector is doing well, then you choose a performing fund from that sector to carry your investment baton, and when that sector runs out of puff, you choose another fund in the next sector that has taken over at the front of the race. The momentum investor will buy high and sell higher whilst ‘riding the herd’, whereas the value investor buys low and anticipates selling high. Personally I would rather buy something that is working today rather than hope that it will work tomorrow.
The financial industry is not set up to help you become a DIY investor; their business model is set up to create earnings for themselves, generated from ‘advising’ you.
This means that your returns have been reduced in order for this to happen. For me it has become all about answering one simple question - will I, or an outsider, have the most interest in securing a well-financed retirement for my wife and I, and also an inheritance
for my children? There are no points for answering this. At the end of the day your savings are your baby and nobody else`s.
I am reminded of a story that originates in South America. It is worth consideration by anybody wondering whether to take up the baton of DIY investing; it’s called ‘The Mountain’.
There were two warring tribes in the Andes, one lived in the lowlands and the other high up in the mountains. One day the mountain people invaded the lowlands and as part of their plunder they kidnapped a baby and took it back up into the mountains. The lowlanders did not know how to climb the mountains or even how to track the kidnappers in the steep terrain. Even so, they sent out a party of their best fighting men to try to recover the infant.
The men tried one route after another but in the end they failed to master the climb. They returned to the village and as they were unpacking their gear they saw the baby’s mother coming down the mountain with her baby on her back. They greeted her and asked ‘how did you do this when we, the strongest and most able men in the village failed?’ She simply shrugged her shoulders and said ‘It was not your baby’.
Remember, as the government endeavours to balance the economy and reduce the country’s debt, it cannot give to anybody anything that it does not first take from somebody else.
As a saver and therefore a person of means, they will
be coming to you, whether you like it or not. Years ago, I used to have an investment target to produce an income greater than my wife and daughters could spend. I have now modified this to include further contributions to the government of which ever persuasion.
This I can better achieve as a DIY investor.
Yours Aye Douglas
I FEEL THAT THE FINANCIAL MARKETS SHOULD BE DEMYSTIFIED
15 DIY Investor Magazine | Jun 2018