The MoneyWeek approach to investing

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I’m Merryn Somerset Webb, editor-in-chief of MoneyWeek. Every day, an awful lot is written and spoken about finance and investing. Much of it is incredibly boring, lots more is either meaningless or plain stupid, and most of it is a complete waste of your time.

Our aim is simple: to give you intelligent and enjoyable commentary on the most important financial stories, and tell you how to profit from them. So how do we do that?

Firstly, by talking to thoughtful people who know their stuff. That means City professionals, fund managers, stockbrokers, industry experts, and the commentators that we respect. We also have a wide range of financial professionals who write regularly for us.

Secondly, by reading a huge amount of financial news and commentary every week. That means all the mainstream sources – press, websites and magazines – and many more specialised ones, such as broker reports, newsletters, newswires, trade journals and so on.

And finally, by writing articles that we would want to read ourselves, which means intelligent, thought-provoking, practical (as in, advice you can make money from) and entertaining, written in normal English.

Our weekly magazine is colourful, accessible, opinionated, and, we hope, a very good read. Plus, we have a free daily email, ‘Money Morning’, which gives you a succinct, punchy view of what’s really going on in the markets.

MoneyWeek starts from a position of healthy, informed scepticism; we are not cynical or faux-contrarian for the sake of it. We think things through independently and give an informed view, which, we hope, will give you a fresh take on things.

We believe that finance does not have to be confusing or overly complicated, and that any averagely intelligent person with an interest should be able to grasp the important aspects fairly easily. That’s what we try to put into practice.

We aim to be actively enjoyable to read. Finance is a technical subject but it does not have to be boring. One reason the financial industry gets away with so much is because it wraps these issues in a cloak of tedium. We aim to cut through that tedium.

You should get to the end of an article, understand the point or practical takeaway message being put forward, and feel you have gained a deeper understanding of the subject.

MoneyWeek’s four key investment principles

There is no single answer, no “perfect” portfolio that will meet every investor’s needs. If there was, and we came up with it, none of us would ever have to work again. But there are time-proven principles that work.

1. Keep your costs down

You can’t control the future, you can’t control the direction of share prices. But you can control how much of a take the financial industry gets – so make sure you keep it as low as possible.

2. Beating inflation is the only benchmark that matters

We don’t care what the FTSE 100 did last year; we aim for “absolute returns”. If you can make your money grow more rapidly than inflation every single year (ie, if you always get a “real” return) you’ll be a happy investor (and this is still damn hard to do).

3. Buy low, sell high

History shows that if you buy stuff when it’s cheap, you have a much better chance of making money than if you buy it when it’s expensive. This is what Warren Buffett does with stocks. It’s what our beloved cyclically adjusted price/earnings (Cape) ratio does for markets. It’s what “rebalancing” does for an overall portfolio.

And the nice thing is, you don’t have to be a sophisticated investor to understand it – as long as you are patient, you can avoid buying expensive markets and just buy and hold cheap ones.

4. Don’t stick all your eggs in one basket (but don’t have too many baskets either)

You can’t control the future, so diversify your portfolio. But that doesn’t mean “buy everything”. In our view, major asset classes break down into four main categories and one sub-category:

• Bonds

• Cash

• Gold

• Equities

• Property (a sub-category of equity but sufficiently different to warrant its own mention).

If you buy good quality, keenly-priced assets across those categories, you won’t go far wrong. The amount you put in each depends on your age and risk appetite.

So that’s what we provide – a roundup of the most important financial stories, and practical investment advice to help you make money – all delivered in a way that will keep you entertained.

Good luck with your investments.