Trying To Find The Exception To The Rule When Investing

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Today’s Question:

In anything, there’s always an exception to the rule. With your financial plan, when do you chase that exception and when do you stick with what’s average? Which will be more profitable in the long run?


Confidence Corner

We all know that you can’t see the future or time the market, but there’s also always an exception to the rule.

Jim Simons, a mathematician and hedge fund manager is making average returns beyond all of our wildest dreams. He consistently averages a 66 percent rate of return each year in the Medallion Fund, which is run by Renaissance Technologies, the hedge fund firm he founded.

Your first question might be, how is he doing that and how can I get that kind of return? But, is this what you should be aiming for?

With your investments, often you hope for something like a 10 percent return but six to eight percent is more typical for a good rate of return. When it comes to creating your financial plan, it’s important to not chase after a pot of gold at the end of the rainbow, because that might not ever come. Greed can get in the way and cause you to make poor decisions instead of focusing on the goals and the plan you’ve set out.  

That said, you can have ambitious goals. You just have to have the drive and motivation to follow through on those. Make sure you’re being smart about your investments by taking action in order to be proactive (not reactive) with your financial plans.

Listen to the full episode to hear more about Jim Simons investments as well as your own or click the timestamps below to hear a specific segment.

[1:01] – Jim Simons, a mathematician and hedge fund manager figured out a way to have average returns of 66% a year.

[4:44] – It’s hard to know how he did so well or to have predicted this success ahead of time.

[6:42] – If this was something that could be repeated, everyone would be doing it.

[8:04] – Find the advisor that gets you and helps you with your plan.

[9:40] – Use your drive and determination to accomplish your goals.

[10:58] – Know what to expect in the market.

[12:04] – Aim for what you need, before you chase what you think you could get.


A Point Of Wisdom:


Related Content:

PODCAST: Discussing the Laws of Investing, Part 1

PODCAST: Never Assume in Retirement Planning


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Nathan O’Bryant – Contact

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