In the five years to September 2025, the price of the leading crypto currency, Bitcoin, increased over 10-fold. Worldwide, millions have bought crypto currencies and a few have amassed substantial fortunes by being early investors.  For many investors, crypto is the latest, exciting new form of investment that has offered seemingly stellar returns. “Just get off zero” has been the enticing call from some advisers who suggest everyone should have at least some allocation to volatile crypto assets. Why would you want to miss out when the rewards have looked so promising? 

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​Investors should remember, though, that buying either gold or bitcoin is a bet on the behaviour of others, a bet that there will always be someone willing to buy at an attractive price. The same can be said of any investment, but with other investments, earnings are accruing to support a higher price at a later date.  In the case of crypto, a large universe of individual investors will be hoping that future demand will be high.  Gold has for centuries been a clear safe-haven asset that investors, especially central banks, are expected to hold in bad times. This differentiates gold from crypto.  Gold has a track record as a safe haven; crypto does not.

 

The appeal of crypto is just one example of a personal investment landscape that has changed beyond recognition this century. The development of online trading and wealth management platforms has made easy-to-access investment accounts widely available at impressively low cost.  Simple investment strategies are now available to individual investors with a few hundred dollars, euros or pounds to invest each month. Earlier generations could rely on employer final salary pension schemes, but now many millions have personal responsibility for funding their own retirement.

 

The new world can represent an unsought challenge.   Most probably have little interest in finance and no wish to learn.  But love it or loathe it, millions now need to pay attention because their livelihoods will be strongly influenced for good or ill by the decisions they take or the decisions others take on their behalf. 

 

The aim of our book is to help investors navigate this new world. In this revised and updated edition, we examine in some detail the case for investing in crypto currencies.  But we set this in the context of the fundamentals for valuing investments which have been understood for at least 300 years. A constant theme throughout the book is that while the nature of investing is always changing, often propelled by new technologies, the fundamentals are remarkably constant.

 

The book is divided into two halves.  In the first, we outline the principles for thinking about risk, return and investment objectives.  We start the book with a set of 22 investment principles for successful investing, to which we refer throughout the book.  One of the most important says that “If you see easy money to be made in the stock market or anywhere else, you have not looked hard enough”.  Another of our principles says that a more important decision than what to buy is how much to buy.  However promising the opportunity, do not put more into a risky venture than you can afford to lose.  It sounds like commonsense but, with the benefit of hindsight, we can see that even the most knowledgeable can threaten their (and perhaps their families’) livelihoods by investing too much in what seemed to them to be an outstanding opportunity.

 

In the second part of the book, we discuss the different types of investment and how they can form part of your investment strategy. As well as equities, credit and other bonds, we discuss so-called alternative investments: home ownership and other real estate; works of art and other investments of passion.

 

As markets are transformed, and new opportunities for investing and making money arise, investors need to be able to think beyond dodgy online chatter.  They need to be able to challenge investment company salesmen who will be motivated to recommend the latest new financial product, and they need to be able to place in context the anecdotes of individuals who may have made much money from the likes of crypto. In our opinion, the changing investment environment provides compelling reasons to keep investments simple and not get carried away by the prospect of making easy money. There is, we believe, no such thing.

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Investment principles

 

Our 22 key principles will help investors make sensible decisions when they feel tempted that they “ought to be able to do better”. For example, our first chapter is called “The crux of the matter”, an appeal to only make an investment if the investment case is convincing. If the price of an investment has increased, that makes it more expensive.   It does not make it a worthwhile investment.  The investment principles that underpin the book will help investors reduce the chance of making major investment mistakes. They are:

1. Always look for the substance in any investment proposal.

2. When investing, your most important decision is often not what to buy, but rather how much of an attractive opportunity to buy.  

3. We can be our own worst enemies when we take investment decisions.  Discussions with a knowledgeable advisor can help us manage our money better. 

4. Not all risks are equal.  Risks that might strike at bad times are especially damaging. 

5. If you see easy money to be made in the stock market or anywhere else, you have not looked hard enough. 

6. Star managers don't walk on water. 

7. Most shares underperform the stock market. 

8. In times of acute crisis, government bonds are still the investor’s best friend. But over time, they are vulnerable to inflation.

9. Financial crises are a hardy perennial.  You will encounter them and you should know how you and your savings will respond . 

10. When investing for the long term, it is better to be a tortoise than a hare. 

11. We don’t believe anyone knows where interest rates and inflation will be in 15 years’ time, and this matters 

12. A sensible model portfolio will put you in a good place before a crisis engulfs markets, which it will. 

13. Maintain a buffer of cash.  You don't know when a bad times will arrive. 

14. Simple model allocations are easy to explain and help investors stay disciplined.  They are widely used. 

15. Limited supply can underpin strong price rises for Bitcoin and also gold, but we see no place for either in the strategies of long-term investors.  

16. The glory of compounding accrues most easily to those who adopt a sensible strategy to which they add regular contributions over time.

17. Expensive fees are a dead weight that drag down living standards.

18. Investing in a global tracker fund can be a sensible way to invest in equities.

19. If adjusting your investments to reflect environmental, social and governance priorities, remember to keep your investments well diversified. 

20. In bad times, corporate bonds always show their intrinsic and unhelpful link to stock market volatility.

21. Investing in property is an important component of everyone’s finances and well-being.  Your home has a volatile price, but it can also be a low-risk safe harbour.

22. Investing in things you enjoy owning or supporting gives you more than just monetary rewards. 

 

Look out for these principles throughout the book.

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No investor, however large or small their wealth, needs to feel bamboozled by advisers into adopting a complicated strategy they do not understand. The book discusses the contribution of advisers, the impact of high fees on living standards, and considers more sophisticated ways of investing.  We conclude that any investor can sit back and say, “No, I want to keep things simple but appropriate.”

 

There is always a suitable strategy for investors that simply combines cash, well-diversified equities and government bonds. Investment managers will typically recommend a more expensive and more complicated strategy. They increasingly suggest, for example, that diversification now requires an allocation away from the stock and bond markets to private markets. Private markets carry high fees, are less transparent than they sound and are less flexible as they normally require longer-term commitment. They remove valuable options to change or rebalance strategy at any later date and are often more risky than they seem. In sum, the arguments in favour of private market investing are less persuasive than they appear. Our book gives investors the knowledge and vocabulary they need to understand issues like this and, if necessary, challenge strategies that complicate how their money is invested.

 

Despite the revolution in online trading platforms and fintech, financial markets should still be seen as a place to protect and grow wealth. They are not a reliable place to grow wealthy. They offer an environment in which the patience of the tortoise can compound investment returns on regular generous pension contributions into a decent savings or pension pot. The skittishness of the hare, however, is most likely to end in disappointment. Research suggests that most who try their luck as full-time day traders soon conclude that it is not a sustainable career choice.

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Investment lessons

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We conclude our book by reminding investors that bubbles and frauds that lead to large losses happen.  This is not news. During your time as an investor, it is almost certain that you will be offered tempting opportunities to participate in what with hindsight will be judged a mania, a bubble, or a fraud.  The more you actively participate in markets, the greater your exposure. Frauds and bubbles are always easiest to identify after the event, when the bubble’s bursting has confirmed its existence, or that of a fraud.  When tempted by exciting opportunities, you need to identify how much pain you can tolerate should something that might be a bubble implode.

 

 If there is one overriding message we want readers of this book to reflect upon, it is the importance of always asking of any investment proposal: “Where’s the substance?” Don’t get seduced by the hope of “money for nothing”.  As with any lottery ticket, the spectacular winnings of a few tempt the many into dissipating their savings when sober reflection points the way to well established routes to managing your savings. 

 

Our 22 investment principles are intended to help investors avoid mistakes.  Fashionable investment ideas often have a Ponzi-like structure, which reward early participants but can be a disaster for late entrants. Allied to this is the message, already emphasized, that if something has gone up in price and many are buying it, that makes it more expensive.  It does not make it a worthwhile investment.   Finally, we caution that it is easier to make a devastating mistake when deciding how much to invest, rather than deciding what or when to buy. 

 

Good luck, happy investing and please don't let your desire for better returns put more at risk than you can afford to lose.

 

Peter Stanyer

Masood Javaid

Stephen Satchell

 

March 2026 

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