We are in a 24/7 plugged in world. Everything moving, everything changing, everything updating second by second. Today, time zones talk to each other no matter what the time. We educate in virtual class rooms that either never have class gatherings or have them all the time, albeit remotely transmitted. We work at jobs that require answers to questions and production assignment completion almost instantaneously. In many cases, our jobs are remote as well; we are the voice on the other end of the phone. We buy, we sell, we service, we research, we move intangible property from one corner of the earth to the other ? almost all without human intervention.

Those that work on the tangible, the vehicles, construction, the bricks, mortar, paint, the revamping of the innards of a building ? the concreteness of it all ? they, too, must now understand and function effectively with digital, wireless, broadband, computer hardware and software. Oh, what a steep learning curve we are on. Just trying to be in the game means expending all one's energy staying ahead of the game. When then is there time to stargaze for an hour, or read a book, or review one's finances, or plan for the future? We all want to do these things, but those other unrelenting 24/7 responsibilities call us back to the merry-go-round. There is so much knowledge to know, we can never absorb it all, yet we must try in order to perform at our best in the new 24-hour working world.

A few years ago, clients would love to tell me of their successes (and failures) in investment markets. They liked playing the markets. It was fun to buy and sell on-line; it was easy and really anyone could figure out timing the market and make some real money. We suspected then, just as we know now that this is not so. Thirty years ago, in his classic book, "The Intelligent Investor"(fourth edition published in 1973) Benjamin Graham stated, "That the intelligent investor can derive satisfactory results by making sure that when you buy you do not pay too much for your stocks. He was equally sure that if the investor placed too great an emphasis on market timing, he/she would end up as a speculator with the speculator's results. There is no basis in logic or in experience for assuming that the average investor can anticipate market movements more successfully than the general public." Pretty simple advice from the greatest investment advisor of the 20th century.

I'm not hearing as many of those comments as I used to. Understanding and monitoring one's investments has become not fun, but another stressful chore representing more homework, another learning curve that many just don't want to spend the time on anymore.

In fact, the overwhelming message that comes from many clients is that they would like to control to the greatest extent possible, their simplicity in living. Things outside the family circle are just so hectic that there is a need to create an island (within an island) of serenity. And clients are investing for simplicity. Speaking of timing the market and faced with thousands of choices (would you believe 35,000 offshore alone) in mutual funds, large cap growth and value, small cap growth and value, country or geographically specific, bond funds from highest grade triple A-rated, to bond funds slightly above the credit quality of Donald Trump's debt restructuring, some investors are turning away from plunking their money into any one sector that may time itself out of existence, even temporarily, for a month.

From those still interested in individual securities, the common complaint revolves around issues of CEO compensation and figuring out if corporate funny business is going on (as one lady said to me). Even assiduous financial analysts have missed much of the corporate malfeasance in the last few years. No one wants to find out their favourite stock has tanked temporarily overnight, even if it does resurrect later, such as the Tyco performance.

We all tend to be risk averse. But we also know that diversified portfolios with a good dose of equities may have the best chance over the long-term of outpacing the insidious effects of inflation; it's the waiting to see that is hard. Yes, real estate does that too, but not everyone has the wherewithal to own an investment property. And in today's global world, it only makes good sense to avoid concentration of your assets.

So, what are clients choosing for investments these days?

Chet Currier, a Bloomberg new columnist, wrote a recent article called "The Fancy New Fund Strategy: Simplify, Simplify" (see below). According to his report, the number of mutual fund choices has dropped in the United States. New type of investment vehicles known as asset allocation funds, life-cycle funds and fund of funds have come to the forefront. And they are enormously popular, perhaps because of stressful lives or merely turning over the management of investments to those who are able to provide the best. In the United States, individual investors have poured more than $50 billion into these all-purpose vehicles in the first 11 months of 2004.

The idea behind these asset allocation funds is not new. The wealthy have always been able to afford the services of individual portfolio managers, who monitored, bought and sold securities according to a set investment philosophy, be it conservative, moderate or pretty aggressive. Modern advancements in technology and processing have allowed the global industry to provide these same broadly diversified funds to every man. As Mr. Currier noted, investments geared to your specific time frame, risk tolerance, automatic rebalancing, simplified record-keeping and professional investment management, all done for you. Simple.

Investors in Bermuda reflect parallel feelings. By and large, they want simplicity, very broad diversification and safety of principle. They are voting with their pocketbooks the same way, choosing mutual fund managed portfolio products for simplicity and diversification, and capital secured growth products for conservative equity participation.

To find out more about truly diversifying your portfolio, or to discuss a confidential objective review of your financial profile, please give me a call at 299-5578.

The Royal Gazette