Why investing doesn’t always have to be difficult

PUBLISHED: 13:39 08 February 2019 | UPDATED: 13:39 08 February 2019

Investing isn't really that difficult, says Peter Sharkey. Picture: Getty Images

Investing isn't really that difficult, says Peter Sharkey. Picture: Getty Images


Finance columnist Peter Sharkey on why investing needn’t be too complicated.

I’m not a great one for spending time aimlessly browsing online. Granted, it’s very easy to get distracted as you’re searching the internet for something specific, perhaps when investigating an area of a country you plan to visit, but I try to resist the temptation to haphazardly stray off-piste.

Becoming engulfed in the ether is often akin to unwittingly wandering into a dangerous part of a town with which you’re unfamiliar. While there’s no particular threat to your person, the internet sometimes presents a different menace: pretty soon you’re being swamped by enticingly-headed emails inviting you to sign up for this or that and woe betide the person stupid enough to open one of them.

I was mindful of this recently after my wife and I decided to sell a small seaside apartment we’ve owned for years. Our plan had been to spend much more time there as we got older, but keeping it up together gradually became more of a chore and, as our tax liability rose steadily and the monthly management fees grew at an even faster rate, we took the decision to sell.

Interestingly, we never seriously considered living in the apartment permanently, so the property has always fallen into the category marked ‘investment’. This meant that the sale proceeds, in the form of a lump sum, had to be invested, preferably in lower risk areas.

Our apartment was a classic ‘lock-up-and-leave’ residence and we wanted something similar from wherever we invested the sale proceeds, which explains how I found myself scouring the internet on a search for ‘perfect returns from lump sum investments’.

They don’t, of course, exist, but you can get pretty close.

Many of the best, most informative investment-related books I’ve read are American and while reading a handful of reviews of titles focusing upon lump sum investment, I noticed that another, Investing Demystified, by Lars Kroijer, was frequently cross-referenced.

It transpires that Kroijer has written one of the very best personal investment books I’ve ever read. It doesn’t deal specifically with lump sum investments, but the strategies outlined in Investing Demystified are so startlingly simple, they could apply whether you were saving £100 a month or had millions to invest in one go.

Kroijer’s premise is that when investing, most of us do not have an ‘edge’, an advantage which enables us to consistently beat the market. He defines the edge as a characteristic bestowed upon those “with access to the best and most timely information, analysis and financial models.”

Yet Kroijer maintains that ordinary investors are not necessarily disadvantaged provided they construct what he calls a ‘rational portfolio’.

This consists of “...the lowest possible risk investment combined with a portfolio of world equities, and potentially other government and corporate bonds. Adjusted for a few individual elements like risk and taxes, over the long term, it will be very hard to outperform.”

That’s some claim, but it is not, as the author explains, “...the brainchild of yet another investment professional you may never have heard about (me), but instead is a practical and cost-efficient implementation of decades of work in portfolio theory by the sharpest minds in finance.”

While this makes it sound as though readers are going to have to plough through hundreds of pages of economic theory, complicated investment formulae and detailed risk analysis, nothing could be further from the truth. Indeed, by the end of chapter five, Kroijer has effectively outlined his simple theory underpinning the ‘rational portfolio’, but doesn’t pad the book out by waffling, re-iterating the same points time and again and filling pages with pointless diagrams – too often a blight on otherwise well-written investment books.

In summary, though it’s not something I’m in the habit of doing, my meanderings through the ether ensured I unexpectedly happened upon Investing Demystified . At less than £20 including delivery, I consider it one of the smartest investments I’ve ever made.

TAM Asset Management Ltd offer investors the opportunity to invest in a variety of simple ISA portfolios based upon their attitude towards risk. For further details, please visit the MoneyMapp website.


•£668 million

According to online finance portal, 45pc of Britons plan to buy something for their loved one on St Valentine’s Day. The total amount we’re expected to spend on purchasing what we hope will be the perfect gift is £668 million.


In reverse order, the top three most popular Valentine Day gifts in 2018 were, in third place, with 30pc: flowers. In second, with 31% were chocolates, but with 38% of the votes, the most popular Valentine Day gift was lingerie. Popular with whom, we wonder.

•11 million

Two stats unlikely to shock: there were 21 million roses sold in the days running up to February 14 last year, while 11 million text messages were sent on the day itself, significantly more than on any other day in February.

For more financial advice, check out Peter Sharkey’s regular column, The Week In Numbers.

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