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Oracle: Planning your journey

Oracle: Planning your journey

Window or aisle? Table? Power socket? Forward or backward facing? These are the all-important questions that I ask myself every single time I book a train journey.

Ticking the boxes and selecting each of these options in the dropdown menu can take time and raise blood pressures in the process, particularly when the stress-inducing “limited spaces” notice flashes up.

But the ability to reserve a seat, and the privilege of being able to do so, is not something I take lightly, having once spent the whole journey from London to Newton Abbot sitting on the floor, facing backwards, next to an automatic door that kept opening.

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For me, at least, the power to choose options such as the direction of travel and the type of seat can make a real difference to a journey.

Investments are no different.

Best buys

People often ask me for my views on the best buys of the moment: US equities? Emerging markets? European bonds? They might be disappointed when I tell that them it depends entirely on what they want to achieve.

If they are a pro-risk investor who can stomach a lot of volatility, they might like the growth potential of emerging market equities and be unfazed by the asset class’s big moves up and down from month to month. If they are approaching – or already in – retirement, chances are they will care far more about capital preservation and steady income generation, so fixed income might be an attractive option. 

Many of us even have geographic biases, leaning towards the securities listed in our home nation or region, while others of us are simple naturally more risk-averse. For example, this week’s chart shows volatility versus 10-year annualised returns for a few asset classes, illustrating just how varied some of these choices can be. There is no right or wrong answer for investors, so long as their strategy gets them where they want to be.

When it comes to my choice of seat, I do not have a fixed preference. Sometimes, I am desperate to snag a table to enjoy cans of G&T with mates as we head out of London for a weekend trip. On other journeys, I could not think of anything better than thumbing through the day’s Financial Times with a freshly brewed tea in the quiet carriage.

For a daytime trip, a window seat is my top choice, as my Illinois heart swoons at the sight of the rolling hills and dramatic skies of the British countryside. After dark, I would rather not stare at my own reflection endlessly, so the aisle seat makes for quicker trips to the cafe car to stock up on crisps and shortbread. This kind of active, thoughtful selection really does make a big difference when the journeys are long.

Personal goals

Whatever our personal goals, we all have one thing in common: we want to get safely to our end destinations. Investing is just the same: there are certain principles that resonate regardless of our individual preferences.