Big brains do not always equal wise investments

MOST individuals don't have the time, knowledge or expertise to construct and manage investment portfolios, let alone the discipline to sell stocks that have performed well.

- Rob Kenyon

That applies through all sectors of society and famously includes one of the whiz-kids of his era, Sir Isaac Newton, one of the cleverest men ever by most measures.

He lost around a third of his not inconsiderable fortune (approximately £5 million in today's terms) investing/speculating in the South Sea Company. He didn't diversify into shares of other companies, and he didn't employ a professional investment manager!

Not very clever.

But at least he recognised the errors of his ways.

He wrote: "I can calculate the motions of the heavenly bodies, but not the madness of the people."

In the current turbulent times that madness takes in high volatility, the growth of populism, fake news, threats and destabilisation, online influencers, the promotion of crypto currencies as sexy, the implication that only wimps are concerned by risk. Consequently, it is worth going back to basics and examining the differences between investing and speculation.