In Barry O’Neill’s most recent article for the Press & Journal he shares some of the lessons that can be learned from the recent Volkswagen scandal.
Firstly, Barry points out that too much exposure to any one security is extremely risky. Pointing to the 42% fall in Volkswagen’s share price during September, he reminds us of the age-old adage of not having all of your eggs in one basket. He cites a further example, reminding us of the plight of banks which were once considered the most secure of investments, before becoming some of the worst.
Secondly, Barry highlights the futility of market timing. As he points out, nobody could have predicted the events at VW, not even the day before the news broke. It was a similar scenario with the banks back in 2008.
Perhaps the key thing VW and the banks had in common was a ‘win at all costs’ attitude; an attitude that ultimately led to them misleading customers. Barry believes they are not alone and that certain players in the investment industry routinely mislead customers about the true cost of investing. His advice is to check the full annual running costs of your investment and pension funds, and if necessary, make the changes needed to spread the risk more widely whilst reducing running costs.
You can read the whole of Barry’s article here or by clicking the image below.
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You can view Barry O’Neill’s profile here.