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Investing Made SimpleA Candid Financial Advice guideStraightforward guidancehelping you make good decisions

Investing Made SimpleCandid Financial AdviceAbout UsContentInvesting Made SimplePremiumCandid Financial Advice was born out of old colleagues, Justin Modray and Ian Mill-About us2The roller coaster ride4What not to do6What to do8ward, wanting to launch an advice firm that does the right thing for its clients.Since launching in 2013 the business has flourished, thanks to attracting a steadyfinancialflow of clients and looking after them well.We provide independent financial advice to individuals across the UK from our officein Bath. Our expertise is looking after people who are retired, or organising their finances in readiness for retirement.What successful investors say10A final word11Our role is to help you make great decisions and then take away as much of the painas possible, giving you peace of mind that your financial affairs are being handledadvice at aprofessionally and cost effectively.What sets us apart is putting your interests first, providing premium advice and service at an affordable price. We work with clients remotely via phone and/or videochat, forging really strong working relationships. The overwhelming feedback is a significant advice and service upgrade, along with greater trust and confidence. The bonus is cost savings often running into thousands of pounds a year.fair price23

Investing Made SimpleInvesting Made SimpleInvestingThe roller coaster rideA financial loss carriesmore than twice theemotional burden of theequivalent gainCoping with a crashIn a complex world, we seek predictionsKeeping it simpleA ʻʼcrashʼ tends to send us into over-of certainty when history teaches usWarren Buffett describes investing asdrive, challenging people when theythat markets seldom act as we expect.simple, but not easy. Being a successfulfeel at their most vulnerable. In fact,That is why economists can explain withinvestor can be simple if you stick todealing with their emotions might beabsolute clarity what happened yester-some core principles and avoid somethe biggest challenge facing most in-day, but never what will happen tomor-common pitfalls.vestors.row.In this guide we explain our approach toInvesting is often compared to riding on aroller coasterGiven they both share a tendency for sudden sharpfalls, it is easy to understand why.ʻhop offʼ at any time, albeit you risk nursing painfullosses.But that really underestimates just how challengingYou are also constantly bombarded with a steadyinvesting can be. With a roller coaster you donʼtstream of news headlines, articles and ʻexpertʼhave the option of getting off mid-ride, but youcommentary predicting the next big thing orknow that everything will be OK in the end.imminent disaster, often at the same time.A financial loss carries 2.4 times theInvestment professionals, to a degree,investing. This is not a get rich quickemotional burden of the equivalenthave an interest in perpetuating theseguide, nor is it for speculators or thosegain, meaning your decision-makingmyths. Complexity creates mystiquelooking for the next big thing. It is forcan be at its weakest when you need itand work. Fund management groupsthose who accept the investment jour-most.prosper by launching new funds and en-ney because they realise that, in thecouraging you to believe in the cult oflong run, it is the best way to safeguardChasing successthe 'star manager'. In turn, wealth man-their financial future.Most fund managers fail to consistentlyagers and financial advisers encouragebeat the market, yet we are drawn toyou to believe in their ability to pick thesuccess stories and the belief it will bewinners.different this time.Investing rarely comes with such solace. You can45

Investing Made SimpleInvestingWhat not to do2012 6.3%-2.4%Invested throughoutMissed 30 best daysThe above figures show FTSE All Share annualised returns (income reinvested) between 31/02/2017 - 31/01/2022.Two common pitfallsThey compare remaining invested throughout versus missing the 30 best days during that period. Source: Fidelity.Successful investing often owes a lot to avoiding two common pitfalls:Trying to ʻcallʼ the highs and lowsChasing past performanceMoving money in and out of markets, attempting toBuying or switching into shares and/or fundbuy low and sell high.managers who have recently outperformed themarket.In both cases, success owes far more toprepared to ride out the bumps alongeven a few days of a potential recoveryluck, and the repercussions of beingthe way.can have a big impact on your finalwrong can be very damaging.return.Markets have a habit of doing theTime in, not timingopposite of what you expect.Time in, not timing, the market is theSometimes they continue rising whenkey to successful investing.good sense suggests they should do theopposite.Holding your nerve during the darkThis is definitely an area where thesmall print doesnʼt lie. Past perform-When big falls do happen, they typicallythings any investor can do. That meanscome out of the blue. When a marketinvesting for the longdoes crash, toughing it out is invariablyterm (at least five years) and beingthe sensible thing to do, as missingJust because a ʻstarʼ manager has delivered in the past, there is no guaranteethey will continue to do so.ance tells you what has happened. Itdoesnʼt tell you what will happen, and isa weak guide to the future.There are many reasons that accountfor success, not least, luck and ʻrightplace, right timeʼ. Sectors and styles fallThere are thousands of funds to choosefrom and only a minority tend to outper-times is one of the most important6Chasing past performancein and out of favour but chasing pastperformance rarely works.form over time and come close to justifying their charges. Even picking fromthis smaller subset is precarious.7

Investing Made SimpleInvesting Made SimpleInvestingWhat to doExample portfolio diversificationUnderstanding what you cannot control, or where success owesmuch to chance, helps you focus on a more reliable approachStock MarketsPortfolio diversificationFixed InterestThe chart (which should not be seen as advice or a re-Commercial Propertycommendation) is an example of a diversified portfoliothat includes different asset types and markets.Diversifynext ʻbig thingʼ, both rely on courageManage risk through diversification andControl Costsblending different asset types and mar-Other things being equal, controllingkets e.g. stock markets, fixed interest in-costs is the single most important thingStaying the course; avoiding impulsevestments (gilts and corporate bonds),you can do to improve returns.and maintaining perspective are key tocommercial property and potentiallyothers.Alternativesand discipline.provide a simple, reliable, and extremely low-cost basesuccess. You should be heavily predisSeemingly small percentage changeshave an enormous impact when multi-All have different attributes and tend toplied by large amounts of money andbehave in different ways to each other.time. Be particularly wary of expensiveportfolio management services andKeep cash in the bankanyone who tells you that charges areKeep a healthy rainy-day cash float. Thisnot important.Our approach is to use tracker funds as a core as theyfor a portfolio. We then add a carefully selected mix ofactive fund managers but keep exposure to individualfunds to sensible levels.Each asset type will also be diversified. For example,posed to patience.stock markets will be spread across the globe, as wellHowever, the exact blend of assets, markets and invest-as different sectors and company sizes. And fixedments is a matter of choice, and will depend on yourinterest will contain a wide mix of government andown preferences, attitude to risk and personal circum-corporate bonds, again across the globe.stances.allows you to think long term with yourinvestments and acts as a ʻcomfortMaintain disciplineblanketʼ during the inevitable darkHolding your nerve in the face of markettimes.turmoil, and not being seduced by theWe use tracker funds as a simple,reliable, low-cost core for portfolios.89

Investing Made SimpleInvestingWhat successfulinvestors sayA final wordFrom usWe spend a lot of time helping our clientsinformation. And if you have any questionsmake good decisions, of which sensible in-feel free to give us a call or email.vesting is key. Our disciplined, diversified, low-Words of wisdomcost approach has proven itself through mar-We are firm believers in sensible diversification and not trying to time markets. But, rather than take our word, here are a few wordsBest wishes,ket crashes, wars and pandemics.of wisdom from some very successful investors.If you have found this guide useful, please visitour website, where youʼll find a host of usefulJustin ModrayFounderBenjamin GrahamJohn BogleWarren Buffet“The investorʼs chief problem - and his“Your success in investing will depend in part“I make no attempt to forecast theworst enemy - is likely to be himself. Inon your character and guts and in part onmarket - my efforts are devoted tothe end, how your investments behaveyour ability to realise, at the height offinding undervalued securities.”is much less important than how youebullience and the depth of despair alike, thatbehave.”this too, shall pass.”Lower CostsBetter AdviceImproved ServiceExpertsWe expect youʼll makeOur advice is centered aroundOur clients rate us over 9 outOur views and comment aresignificant savings versus anyputting your interests first.of 10 across a range of areas,regularly sought by theincluding service.National Press.comparable service.ConclusionSuccessful investing is not as difficult as it looks.It involves doing a few things right and avoidingSmall printserious mistakes. In fact, avoiding big mistakes isCandid Financial Advice Limited is authorised and regulated by the Financial Conduct Authority. FCA registration number 630986.the best way to ensure above average returns.This guide does not constitute financial advice. It is intended to provide guidance on the issues to consider when investing for UK residents. ItTerry SmithWhilst speculating involves backing hunchesPeter Lynch“When it comes to so-called marketand putting your emotions first, investing is“Far more money has been lost bytiming there are only two sorts ofabout having the wisdom to know what youpeople: those who can't do it, anddonʼt know and mastering your emotions.those who know they can't do it.”10investors trying to anticipateis issued by and copyright of Candid Financial Advice Limited, an independent financial adviser. Published June 2022,Please remember investments can go down as well as up in value and there is no guarantee that you will not lose more than you are comfortablewith. Investment income can also go down as well as up.corrections, than lost in the correctionsthemselves.”11

6 Riverside Court, Bath BA2 3DZ0203 397 cialadvice.comCandid Financial Advice Limited. Registered in England and Wales company number 8261124.Registered office: 6 Riverside Court, Bath BA2 3DZ.

INVESTING MADE SIMPLE candidfinancialadvice.com. Foreword If you think there are some in the investment world who overcomplicate things to jusfy their fees, you are probably right. There is much to be said for keeping things simple (and costs low!). But more worrying sll are those who purport to be able to second-guess markets and pick the .