This morning I was with a client discussing his portfolio and investments, when he made a comment that I have heard many times before. He asked, “Are there any exciting investment options available?” What he meant to ask was; is there anything new, different, which, while being different than the existing equity or debt investments, would also be highly rewarding in the shortest possible time. Some of these guys would have heard a coffee table conversation of a friend who had invested in Bitcoin in 2012, and now, how he has been able to sell a small portion of his holding and buy a yacht or maybe heard of a friend whose angel investment returned 6x returns in 2 years time.
However, I have often found that people have Selective Amnesia as far as speaking about their investment track record. They will go to great lengths to tout on about a small investment which has made a ‘great return’ but won’t tell you about their 80 % portfolio that is sunk due to bad judgements. So, it’s important to take these statements of ‘great returns’ with a pinch of salt or dig deeper if this has been across his entire portfolio. If he has not had a loss at all and only made stupendous profits, then he must be sitting amongst the Warren Buffets or Bill gates of the world.
You can go buy some Crypto currencies or buy lottery tickets or visit the races, though the outcomes are all the same. They provide you with lots of excitement and for some time also give you some great returns, but will they help you create long term wealth? I dare not say. Warren Buffett says creating wealth is a slow and boring exercise. So, don’t fall for statements of people with Selective Amnesia. If your investment plan is suitably boring and is long term oriented, then chances are that you will end up really very wealthy if you follow through on it.