After a fairly drab beginning to the investment year, we decided to explore a central issue which led to the development of the IRP System. The issue is the perception that investing is a difficult and complicated process.

Is investment a difficult and complicated process? Yes, but not for the reasons most people think.

Not a resource or knowledge gap.

Investors, both amateur and professional, are often intimidated by the vast amount of financial market data available for collection, organization and calculation. Financial professionals from the established firms, pundits from the news and financial media and various experts, gurus and assorted soothsayers on the internet (192m hits for the search term “investment”) certainly give the impression that the main obstacle to successful investment is access to the tools that will unlock the secrets of the market. For the most part, they also seem to speak a different language when they talk about what drives the market.

Vendors of financial products highlight the tremendous resources that they have invested to bring you good investment products. The unspoken point is that an amateur investor is hopelessly outclassed in this financial arms race.

While we recognize that the intense competition to out-analyze the next investor has led to large and efficient financial markets, we would argue that the real answer to why investment is difficult lies elsewhere.

We think investing is difficult for two reasons:


We have explored this issue in our e-book. Simply stated, the biggest obstacle to a successful investment plan is the Limbic system, the fight or flight portion of your brain that sits between the outer cortexes (where complex functions like thought and speech take place) and your brainstem (which controls involuntary functions like breathing and heartrate). The Limbic System secretes happy hormones when the markets are near their tops, boosting confidence in our buy decisions. And when markets fall, the chemistry lab in our Limbic System supplies us with just the right cocktail to help us sell at the bottom. Our emotions lead us to buy high and sell low. Any system which avoids that outcome is by definition superior to relying on “gut feelings.”

Attention to detail

This is another serious drag on any investment plan because the usual solution is to outsource the minutiae of the investment process at a very high price. There is nothing wrong with paying a reasonable management and custodian fee. But investors do not realize that there is often no value associated with high front end loads or large withdrawal penalties. These fees can have a significant impact on long term investment performance.

New initiative

While our main efforts have been on fine tuning the system to remove emotions from our investing , we are looking to close the gap on the details of investment which many find intimidating and often expensive.

We will concentrate on the products (primarily active and passive funds and ETFs) and the best ways to access those products online and in person.

Since many of our conclusions will be highly subjective, we welcome any input from our readers.

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