Would You Fire An Investment Advisor Who Averaged 29 Percent Per Year?

One of my father’s friends is a Scottish immigrant named Bill.

He doesn’t have time for fools. “Could you talk to Bill about investing?” my father had asked. “He just fired his financial advisor.”

At the time, I was visiting my parents. After dinner, Bill dropped by. As Bill poured himself a beer he said, “I’ve had three different investment guys in the past five years. I fired the third guy last week.”

Bill runs a company that repairs heavy-duty machinery. If one of his mechanics isn’t performing, he knows right away.

“Investing is different,” I explained to Bill. “You’ll have to be more patient with your investments than you are with your mechanics. Even the world’s best investment strategy doesn’t win every year.”

I gave him a copy of my book, Millionaire Teacher and recommended a portfolio of low-cost index funds. That was three years ago. I wondered, at the time, whether Bill had the patience to manage a portfolio of index funds.

This week, I got my answer when my father brought me up to speed on Bill and his portfolio.

“He gave up on the index fund account after about a year,” he said. “He wasn’t happy with its performance. He met a guy who promised stronger returns if he invested everything in oil.”

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Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

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