Investment Book Recommendation

The Little Book of Common Sense Investing
by John C. Bogle.

This is probably the only book on investing you’ll ever need to read. At the 2017 AGM of Warren Buffet’s company, Berkshire HathawayJack (John) Bogle was introduced as the “person who has done the most for the American investor.” He has contributed immensely to making investing accessible to the general public.

We attended the Berkshire Hathaway 2017 AGM and picked up a copy of this book on our return. The book’s message is simple yet powerful. Whether you are a novice or professional investor, you’ll learn something. This is probably the best book ever written for investors to help understand how the investment markets and financial services industry operates. So if we had to pick one book on investing this is it.

“The two greatest enemies of the equity fund investor are
expenses and emotions.”

John C. Bogle, The Little Book of Common Sense Investing

Bogle provides a detailed overview of two different investment options: actively managed funds and index funds. The book provides evidence of why it’s better to invest your money in a low-cost index fund instead of giving it to a high-cost investment fund, run by a fund manager.

He also outlines why;

  1. The way to wealth is to capitalize on the magic of long-term compounding of investment returns.
  2. Most funds will underperform a simple index fund.
  3. The stock market increases and how to value it.
  4. Simplicity will always beat complexity.
  5. The stock market is a giant distraction to the business of investing.
  6. How to calculate future investment returns from the stock market.

Common sense investing is not as easy as it sounds. Let us know if you would like a copy of this Little Book of Common Sense. If you would like us to help you implement some common sense investment strategies do get in touch. We’d be delighted to help.


Make the most of the money you earn by investing it in the right financial areas. We’ll provide you with impartial expert advice to make this a reality.


Fund your lifestyle in retirement by building a savings account. Spend your later years enjoying the things that give you the most pleasure in life.


Your family’s income is at risk in the event of the death or critical illness of the business owner. This is a huge area of risk for you in securing your financial future.


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What is the Investment Outlook

What’s the Investment Outlook?

Covid-19; What is the Investment Outlook?

Covid-19 is first and foremost a human tragedy

While markets were aware of COVID-19 in China, the catalyst for the market drop in late February was when the virus hit Europe. Then it became clear it was now a global issue. As a result of the ongoing COVID-19 crisis, global equity markets fell 30% from their Feb 20th high. Recent recovery means markets have rebounded and are now around -15% from the same levels. A 60/40 global multi-asset portfolio, which consists of 60% stocks and 40% government bonds, is down 5 – 6% over the last 12 months. Not a favourable result, but not the end of the world either.

Stock Market Expected Returns

Stock market share prices are based on an expectation of future company earnings, earnings over the next 30 years, not just over one year. We expect these earnings will suffer for between 10 and 20 months. A global recession is now evident. Investment markets and market-related investments will recover. The expected return of global stock markets remains over 5% pa. This expected 5% pa is very attractive relative to global bonds expected return at less than 1% pa. It looks likely that the massive government and central bank stimulus packages and QE will keep bond rates lower for longer. In the short-term, the movement in the Stock Markets are driven by opinions, sentiment, and fear. However, over the long-term, the global trajectory is upwards, and increasing markets are driven by one thing: earnings.

Patience is rewarded

After an investment market fall of over 20% (bear market), the average recovery period has been 15 months. The last four bear markets have been followed by 10.9 years, 12.8 years, 4.8 years, and 9.8 years of global investment market growth, respectively. The Fama/French research graph below shows that the average US Investment market return after a 20% market decline is 11.65% pa over the following five years.


What Next?

Our emotions will certainly be tested. Working from home, cocooning, and social distancing have and will be challenging on many fronts. Investment market performance can test feelings also. Even in the worst historical markets, stocks never declined as quickly as they did last month. There may be several bear market rallies that give investors a sigh of relief, only to see a move to lower prices.

Reasons for realistic optimism.

Equities are attractive versus most other asset classes. Financials and real estate sectors are likely to come under pressure. Technology and sustainable, climate change industries will prosper. Emerging Markets are the geographic region most likely to flourish quickest. The recovery is expected to be reasonably quick, once a solution to the virus is discovered. A few countries have begun to ease some lockdown restrictions, including two of the worst affected, Italy and Spain.

Days or Decades?

We are very aware of both the local and global issues, particularly around employment and cash-flow, for both individuals and small businesses. As Financial Planners, we try to help you`focus on your lifestyle over the coming years and decades. We try to help you stick to the plan even when its uncomfortable, so that your pensions and investments will provide the lifestyle you are looking for in future years. Sometimes the daily news headlines can be overpowering. A little more time for activities such as gardening, painting, exercising in the fresh air, even parenting, is good for the soul, and even Mother Nature is benefiting in this Covid-19 crisis. In our opinion, cautious optimism is a better view than pessimism and negativity. I think it’s safe to say that 2020 is not turning out like any of us expected, or hoped. The past 90 days have been challenging in many different ways. It is likely the trajectory of the next decade will be upwards and onward, with many bumps and hollows along the way, just like normal. In the meantime, we are here to help. Does anyone else miss Brexit? Read More: What To Do If Investment Markets are in Freefall

Pat Leahy, Certified Financial Planner.

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Compound Interest, 8th Wonder of The World

The 8th Wonder of The World

A Simple Idea.

Charlie Munger, the vice chairman of Berkshire Hathaway says, “Take a simple idea and take it seriously”. The simple idea that should be taken seriously by every investor is the ability to earn compound interest on your savings over the coming decades.

Compound Interest and College Fees

Let’s look at a simple example. We all want to give our kids, or even our grandkids, the best possible start in life and a good education is half the battle. However, education, particularly third level education does not come cheap. College fees may be free, but other costs certainly add up. Conservative estimates suggest annual costs vary, but begin from €10,000 to €12,000. Currently, the monthly child benefit amounts to almost €300 per month for two kids. Take the following scenario: 

  • Save €300 per month.
  • Investment strategy is market related.
  • Timeframe is for 10 years.
  • Assume annual interest rate, net of costs, is 5% per annum.
  • No indexation of contribution applies here.

Compound interest adds €11,544 to the value of your investment. We’ll leave you contemplate the difference between this and the current deposit based returns, which are small fractions of 1% per annum. Simple interest would have added €1,800 over the 10 years.

Snowball Effect

Think of compounding as like a snowball rolling down a steep hill. As it gathers more snow along the way, momentum increases and the ball becomes deeper and broader as it moves forward. Compound interest is amazing but just like most things in life, there’s no free lunch. The simple truth is that it takes a long time to work. To get the rewards you have to stick with it and stay the course during good times and bad. Problems arise with the snowball if you start making withdrawals, a 10 year horizon rather than a 10 month plan is required.

Investment Plans @ 5% p.a.

Focusing on trying to grow your wealth by compounding is a key element of any investment plan. The same applies with retirement plans. Just take a look at the graph below which JP Morgan Asset Management created to illustrate the power of compounding. One line shows the example of somebody starting to save at 25, let it be for retirement. This clever person that starts to save at 25 years old, accumulates circa €284,000 more in retirement funds than the person that starts at 35 years old. The 35 year old has still done well!

Investment Returns – What to Expect From Here.

Perhaps you are wondering about the 5% return piece of this jigsaw. Complex investment options can give the illusion of control. Our theory is that advice doesn’t have to be complicated to be good. Equities have delivered the best investment returns for investors over the long-term. Despite various recessions, business progress has been the order of the day in developed and democratic countries. Equities, which are essentially a collection of businesses, have reflected this.

The MSCI World Index has generated 10 year annualised returns of 7%, 6% and 12% for each of the last 3 decades, respectively (see table below). In our view the easiest way to ensure that a portion of your money will compound at a consistent rate over the coming decades is to invest in a strategy that gives you exposure to world equity markets.

We help you invest in portfolios that focus on large and medium sized companies that are globally diversified. Focusing on dividends plus dividend growth is, in our opinion, the most reliable way to invest in and make money from equities over the longer term. This applies particularly in today’s extraordinary bond market environment, where so many Euro government bonds have negative yields.

Meanwhile, European investment markets remain some 35% below its March 2000 highs, while Emerging Markets equities remain some 25% below their October 2007 highs. Japan is still 45% below its 1989 peak. The world is still concerned about global trade wars, rising Middle East tensions, Brexit, a slowing global economy, a possible recession next year, slowing industrial production, earnings estimates being revised down, possible impeachment of President Trump, etc. 

We do understand these fears, but perhaps investors are too negative in their views. In summary, while we are very aware of the global issues out there. Cautious optimism is a better market view than pessimism – Just look at the investment returns below for the disciplined investors availing of the eighth wonder of the world (Albert Einstein).


Pat Leahy, Certified Financial Planner.

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Investment Book Recommendation

The Little Book of Common Sense Investing
by John C. Bogle is probably the only investing book you’ll ever need to read. At the 2017 AGM of Warren Buffet’s company, Jack (John) Bogle was introduced as the “person who has done the most for the American investor.”

What is the Investment Outlook

What’s the Investment Outlook? Covid-19; What is the Investment Outlook? Covid-19 is first and foremost a human tragedy While markets were aware of COVID-19 in China, the catalyst for the market drop in late February was when the virus hit Europe. Then it became clear...

How to Pick Winning Investments

How to Pick Winning Investments

There’s no greater feeling than being on the right side of a winning stock. The joy of being ‘right’ and making money in the process is insatiable. Jason Zweig, in his excellent book, “Your Money and Your Brain” describes how the brain activity of a person that’s making money on their investments is similar to a person who is high on cocaine. It’s that powerful!

Picking Winners

The problem with picking stocks is that it tells us nothing about the future. Companies and industries change on a continual basis, as technology and human creativity move forward.

Similarly, the stock market, which is essentially a collection of businesses, is always changing. An investor in 1910 would have been excited about the choice of car companies they could invest in. By the 1990s, investors’ attention switched to the new economy as characterised by technology companies such as Cisco, Microsoft, and Netscape.

Even over the last decade, the list of the world’s biggest companies has evolved significantly as the fortunes of different industries ebb and flow. Picking tomorrow’s winners is not simply a case of looking at the companies that have been successful in the past.

What are the chances?

So, what are your chances of successfully picking winning companies? Not all companies are created equal and a large amount of companies provide mediocre returns at best. In his recent study[1], Hendrik Bessembinder, a finance professor at Arizona State University, found a minority of companies provide the majority of the returns in the stock market. Mr. Bessembinder estimates that $32 trillion of wealth (returns in excess of Treasury Bills) was created between 1926 and 2015 via approximately 26,000 stocks that have traded on the New York stock exchange, American stock exchange, and the Nasdaq (All US exchanges).

Of these 26,000 stocks, only 86 of the top-performing stocks (less than 0.33%), were collectively responsible for over half of the wealth creation. The most astonishing fact is that just over 4 per cent of the companies account for all the wealth created. The other 96% only matched the return of the one-month Treasury Bill – with many of them producing less. This is extraordinary. It demonstrates that if you try to pick stocks, you’re very likely to miss the relatively small number of companies that turn out to be winners.

[1] Bessembinder, Hendrik (Hank), Do Stocks Outperform Treasury Bills? (May 28, 2018). Journal of Financial Economics (JFE)

What simple solution should investors implement?

Investors do better when they apply simple solutions to the complex world of investing.  Occam’s Razor is the problem-solving principle which states that simpler solutions are better than solutions that are more complex. If we apply these thoughts to investing, the message is clear; simplicity always beats complexity.

So, what simple solution can an investor implement? Investing in a ‘simple’ globally-diversified equity portfolio will increase the likelihood of having a better investment outcome as you have exposure to all the winners. For example, from 1994-2017, the annual return from an all-World equity index was 8% (see graph below)[1]. If you excluded the top 10% of best-performing stocks, your return dropped to 3.6% per annum. If you excluded the top 25% of the best-performing stocks, your return would have been -4.4% per annum. Stock returns are not uniformly distributed- some stocks do well, some not so well, but by remaining diversified you maximise the chance of capturing the returns available from investing in the stock market.

[1] The ‘all stocks’ world index consists of all eligible stocks in the developed and emerging markets. Returns in USD. Diversification does not eliminate the risk of market loss. Past performance is no guarantee of future results. Index data from DFA.

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Will We Have Enough? – 5 Ways We Believe We Can Add Value

Will We Have Enough? – 5 Ways We Believe We Can Add Value

Time never stands still. Everything in the world seems to be moving at a quicker pace than before. Nowadays, the most common question we answer for the people we deal with is ‘Will I have enough?’. We are continuously looking for ways to improve how we answer this question and add proper value.  As Certified Financial Planners we are continuously evolving. Information gathered and used in the right way can help create a realistic financial plan. 

Truly Independent & Objective Advice

For many of us, money, although we may not what to admit it, is a very emotional subject for us and our families. It often hard to talk about, difficult to make decisions about, and it’s particularly difficult to make totally objective decisions. Part of the value of having a trusted advisor is a second opinion, someone who is completely independent of you or your family, who can provide advice without emotional attachment. In our experience, most individuals benefit greatly from an independent source of advice that allows you to focus on enjoying life instead of worrying about money.


Our initial complimentary consultations typically begin with a discussion about your investment portfolio, and your insurance policies. This transpires over time to a relationship that covers every aspect of your financial life. We try to give you the confidence and reassurance to know that while you are above ground, what type of lifestyle you can afford, and furthermore if you weren’t around, that your family would be taken care of.

By using lifetime cash-flow modelling tools we help you create a financial plan that matches your priorities and fits your lifestyle.


Asset Allocation
Considerable academic studies have shown that over 90% of variations in funds’ investment returns were attributable to the underlying strategic asset allocation. Setting an appropriate strategic portfolio mix, between equities, bonds, and other asset classes, is a starting point for all our clients before considering investment selection. This important decision will have a big impact on your investment outcomes.

“Wealth isn’t primarily determined by investment performance, but by investment behaviour.” Nick Murray


When asked how the stock market will perform, the financier JP Morgan said that “it will fluctuate”. We recognise that while investing is a long-term activity, the long-term is made up of a series of short-terms which can be difficult for investors. Because investing evokes emotion, we look to help you maintain a long-term perspective and a disciplined approach. We aim to help our clients to handle periodic volatility without abandoning their investment plan.


There are distinct measurable benefits to enlisting the services of a Certified Financial Planner, including disciplined rebalancing and tax loss harvesting. Also, the allocation of assets between taxable and tax-advantaged investment accounts, is one area we can add value each year, with an expectation that the benefits will compound through time. Deciding where to allocate assets from a taxation perspective is crucial to a client’s overall financial plan.

How we invest

“To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework”

Benjamin Graham, (1894-1976) Legendary American Investor, scholar, teacher, and author of the book, “The Intelligent Investor”


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How Goalkeepers and Investors are very similar?

How Goalkeepers and Investors are very similar?

Russia 2018 was hailed as a huge success. Moody’s, the ratings agency, said the World Cup’s boost to the country’s gross domestic product (GDP) would be between $26 billion and $30.8 billion over the 10 years from 2013 through to 2023.

One of the more notable statistics from Russia 2018 was the fact that there were 22 penalties scored, considerably more than in any previous World Cup. As I watched some of the action, I was reminded that investors are also prone to making short-term decisions. So, is there a link between how investors and goalkeepers behave when making decisions under pressure?

Many goalkeepers, not unlike investors, have an ‘action bias’. The urge to catch the latest investment trend, such as bitcoin or blockchain, runs deep. According to a 2007 study of 286 penalty kicks, almost 29pc are shot down the middle – a similar number to the amount placed to the left or right. The study found that the goalkeeper has a 33pc chance of saving the penalty if choosing to remain in the centre. However, 96pc of goalkeepers chose to dive to the left or right, eschewing the option to stay in the middle.

Investors, just like goalkeepers, see action as a positive thing. In today’s world of 24-hour information and soundbites, it seems that being ‘active’ is part of who we are.

In the investment world, Ned Davis, a US-based investment research company, has shown that investors are now holding equities for much shorter periods of time. Over the last 90 years, the average holding period of individual equities has declined from eight years to approximately eight months as of the end of 2016. The need for action also extends to investment fund managers.

A recent study* by the University of Ontario, suggests that past fund performance is negatively impacted by the number of times a fund manager changes the investments within his portfolio. The study suggests that the frequent churning of a portfolio is value destroying for investors and results in poorer performance than those fund managers who stick with their investments.

The global stock market (MSCI World) has increased by 1,860% since 1970. If you tried to identify the market troughs during this period, and as a result missed the top 10 performing months due to poor ‘market timing’, your investment return would have reduced by 66%.

Sometimes it pays to be inactive, and to “stay the course” with your investments. The key is to be invested.

*Portfolio Turnover Activity and Mutual Fund Performance

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