What investment has the highest forecast returns for the next 10 years? You might be surprised.

Ok. Yea... I'll admit. That headline is a carrot to get readers in. But why can't I? Newspapers and Facebook posts use click bait all the time. And here you are reading, sucked in by some more click bait.

The first thing you need to do to have a successful investment experience over the next 10 years is to stop getting sucked in by the notion that someone out there can predict the future. I can tell you, if someone could, they aren't sitting on the computer writing blog posts, they'd be out on the beach somewhere, or on their yacht....sigh! But here we are, mere mortals unable to predict the future and needing to work.

Ok, so we aren't listening to predictions from people who don't know. What do we do then? Well, this is the tricky thing. Once someone isn't selling one particular product, they can't tell you want to do in a general sense, because everyone is different. Think of it like wanting to lose weight. Lite n' easy will tell you to buy lite n' easy. Terry Ferguson weight loss shakes will tell you to buy Terry Ferguson weight loss shakes, but a good nutritionist/dietitian will get to know you, your current body, health, goals etc etc and put together a diet plan which may involve a number of these products (but more likely just simple whole foods). The same is true in the finance world. If someone is saying 'this particular asset/investment product etc etc' is the best investment, then understand the motives behind it.

So, I will give you some insight on what I recommend to my clients. Firstly, I don't recommend direct residential real estate, even though it does seem to be a 'popular' investment choice. Why don't I? Well, for a number of reasons. A) it is extremely difficult to achieve diversification in property. Many people will end up with 1 or 2 properties which generally are of the same type/location etc. B) It is very difficult to slowly accumulate a position to property investment. C) You can't invest $20,000 increments. So it usually is 1 very large investment then maybe another one in a few years time. You take on a fair bit of market timing risk. D) They are often tedious and costly to hold: not only do you have rate's, insurance, water, agents fees but there is often repairs, maintenance etc. E) You can't exit your property position over a few financial years to minimise Capital Gains Tax.  Finally, I really do not believe they provide the long term returns many people expect they do. If they were such a good investment, would you expect Australia's most successful people to purchase suburbs and suburbs of residential real estate? They don't. They're busy getting rich in business.

So, what do I recommend. Quite simply, I recommend a highly diversified, low cost portfolio of passive managed funds. They can be Australian and International Shares, bonds, cash  etc and can be a mix of all these things. This gives my clients low cost portfolios that are simple and easy to administer and achieves them good long term after tax and fees returns.

Is it boring? Yea. I guess you could say that. There is no sexy sales talk of seeking high forecast return stocks with a bottom up quantitative analysis approach with a sector forecast overlay.

Why do I recommend what I do? Because it is quite simply the best thing for my clients and I don't care that it doesn't come with some slick sales pitch that no one really understands. It's boring, it's simple and it's the best thing you can do.

By investing like this are you going to get Gina Reinhardt, Frank Lowy, James Packer rich? Absolutely not. To get this sort of wealth, you need to start your own small business, grow it into a medium business then into a large business. This is not what I do. I help average people achieve better than average outcomes and have successful financial outcomes.