Many readers may be getting ready for a holiday or just returning, or for the grandparents among you, you may be facing a busy few weeks helping to look after and entertain the grandchildren. So it seems a time for a light hearted article.

New clients often ask the question “Where did I go wrong” when reviewing their existing investments. Here are a few responses

“You followed the trend”

I frequently see portfolios which include technology funds or some other “theme” funds. Many clients simply follow the herd, having read an article with “this month’s hot tips”. There is nothing wrong with this, the problem arises because there is never a follow on article telling you when to sell.

“You were beguiled by the advertised level of growth or interest”

If the interest rate or investment return quoted in an advert is too good to be true – that is exactly what it is – it is not possible to get these higher rates without incurring some substantial extra risk

You took out a product which was not suitable for your needs”

This most probably occurred because there was an over-zealous salesperson involved, whose interests were not wholly aligned to your own. By the time many clients read the small print, it is all too late. The moral here is always take time to read information on an investment before committing yourself and ask lots of questions.

“You thought it was possible to make a quick return”

Investment is not gambling, one investment is not going to make your fortune, what will serve you in the long run is a well diversified portfolio which matches your risk profile

“You took too much risk and came out of the market at the wrong time”

Many clients do not properly understand the risks involved in the investments they purchase and that the value of their investments can fall dramatically. If they then exit the market, and return to cash they are very unlikely ever to make up the loss

“You did not regularly review your investments”

Many mis-selling situations would never have arisen, if clients and advisers had regularly reviewed investments. If you are looking at the portfolio regularly, it is easy to spot a fund which is under performing or a scheme which is no longer suitable for your needs. We will not now take on new clients who will not sign up to our review service because we believe that it is the ongoing reviewing of investments which will make the long term difference to performance.