Complexity is easier to sell but the more complex a financial plan or portfolio becomes, the harder it is for clients to stick with it. Simple strategies, when clearly defined and explained, work better in the long run.
But simple is harder than complex.
You have to fight to keep things simple because your natural tendencies make you susceptible to stories and narratives. Simplicity is more of a psychological exercise while complexity is more about trying to outsmart the competition.
Complex problems like the markets or financial plans don’t require complex solutions.
Charlie Munger once said, “Simplicity has a way of improving performance through enabling us to better understand what we are doing.”
-Ben Carlson, from this post
Posts
No comments:
Post a Comment