Observations from an investment seminar

I was invited to an investment seminar last week on successful strategies for a wealthy retirement. Over the course of dinner, we were presented some information on planning for retirement. I wanted to share just a few tidbits of information and observations.

1. Superior investment returns depends on setting out and sticking to a business plan for your investments and controlling fees. According to our presenter, an investor who sets out a business plan (also known as an investment policy statement) and sticks to it and controls their fees will return, on average, 3-4% more than an investor who does not (it appears the statistics are taken from active investing). There has been a lot of focus lately on lowering fees via investing in low cost ETFs but my mantra lately is that it goes to waste if you focus on the product without a cohesive strategy.
2. Market timing are self-destructive to retail investors. The presenter also cited that during Peter Lynch’s run as manager at the very successful Magellan Fund (average annual return from 1977 to 1990 of 29%) just as many people made money as lost money. Too many investors bought high and sold low because they could not contain their emotions and entered and exited at precisely the wrong times.
3. We were the youngest people there-which is not a good thing. My friend and I, both in our early to mid 30’s, were by far the youngest people there. I counted 18 people in attendance of which maybe 3 of us were under 40.  Someone sitting across the table from us implied that we were too young to be there. But, as we left, I said to my friend just the opposite. I would have confidence that we are collectively planning for our retirements well if the entire room was full of people in their 30’s and 40’s and not 50’s and 60’s. While I applaud people in the latter age group for attending, the people who had most to benefit were a younger crowd who are beginning to accumulate assets and have the greatest advantage of all, time, to grow their retirement funds. The invitations were not targeted to an older crowd. A friend of mine in his early 40’s got the same invite.  Just as youth is wasted on the young, I guess the same can be said for the greatest asset in investing.