Welcome to Occam Investing.
This site takes a common sense approach to investing, using a simple, unbiased, and evidence-based philosophy. Its aim is to help its readers understand the world of investing, and improve their investment decisions.
I’m a CFA charterholder, currently working for a large asset manager in the UK. I’ve chosen to blog anonymously, as my views may conflict with those of my employer.
Occam’s razor is the principle that the simplest solution is usually the best, and this is especially true for investing. An investment portfolio should be:
- Based on common sense
- Not reliant on market timing
Why did I start this blog?
Firstly, because I have absolutely no financial incentive to do so.
I’m not promoting any products or service, receive no commissions from affiliates or other third parties, and am not tied to any investment provider. The blog’s aim is to provide evidence-based, independent information on investing. I make no money whatsoever from its existence.
Working in the world of investments, I’m well aware that investing can be both intimidating and confusing. But it’s also one of the most important aspects of our lives to understand, given how heavily we rely on our investments to fund our future.
There are a few major obstacles that most people face when trying to navigate the investment world, which I’m trying to help investors overcome through the use of this blog:
1. Much of today’s investment advice – whether provided online or in person – is given with the ulterior motive of promoting a product or service. There are very few sources which investors can turn to to receive unbiased information. It’s human nature that incentives skew our behaviour, and this is a particular problem in the world of investments, where there exists a large informational asymmetry between the informed seller of investment services and the (usually) uninformed buyer. It can often be difficult to work out 1) what someone’s financial incentives are, and 2) how that incentive affects the advice they’re giving.
2. Very few investment providers base their advice on rigorous, academically-vetted, and evidence-based principles. Many still practice an outdated form of traditional active management, which has very little evidence to support its benefits, but exists because many people’s salaries depend on its continued existence. They have no incentive to promote evidence-based approaches, because, in the words of Warren Buffett, “It is very difficult to get someone to understand something, when his salary depends upon his not understanding it”.
3. Everyone prefers a good story over evidence. But investing based on actual data leads to better decision making, and likely better results, than through basing investment decisions on emotions and the hopes of a ‘holy grail’. It’s these convincing-yet-unfounded stories that are often used to sell investment solutions that may not be in our best interests, by those who benefit financially from their sale.
Thanks to a combination of the misaligned incentives of financial institutions, the complex nature of investments, the difficulty in finding truly independent advice, and the lack of evidence-based approaches, many investors are being sold poor investments. They don’t realise that there may be a more appropriate strategy out there for them, or the consequences of investing in something inappropriate.
This blog aims to provide a simple, clear, and un-conflicted opinion on investing. I hope to provide useful, evidence-based, practicable insights, with the intention of helping investors understand the world of investing, and improve their investment decisions.