“If you knew what I know . . . you’d see it was obvious.”

Among individual investors there are a couple of commonly held beliefs. The first is that returns are everything. The faster and larger one can grow his or her nest egg the better. Those who hold this belief know with great certainty, it is obvious to them, that investing is about returns, and the bigger those returns are the closer they will be toward reaching their goals, even if they haven’t spent much time thinking about what they are.

Our history, old and new, is filled with success stories of tycoons who made their fortunes in shipping, rails, oil, steel, computers, software, and web-based applications. There are those who made fortunes cornering markets, hedging them, or getting in on the ground floor before the rest of us.

While none of these examples addresses the capital markets (stock and bond) where most people invest their hard earned money, the allure of fortunes made or even the possibility of beating the market tends to reinforce their belief system. Add to that our natural competitive spirit and its easy to see why we try so hard to get the best returns possible.

Another commonly held belief is that the capital markets are nothing more than a gamble. Some might even say the markets are rigged against the small investor. Many in this group likely in the first group of market reachers earlier in their investing careers. But somewhere along the way they were so ill-treated by the markets that they vowed never to return.

Today’s Brief is inspired by a recent post from Seth Godin that begins “If you knew what I know . . . you’d see it was obvious.” Seth says the statement is the foundational of the rational pitch, or argument. He says two challenges arise from those who hear such a statement:

1. Can you teach us what you know?
2. Once we know what you know, will we actually think it’s obvious, or is this also a matter of belief or worldview?

“It’s a very different thing to say, ‘If you believe what I believe, then this path would be obvious…’ because getting someone to share your beliefs is far more difficult than getting them to know what you know,” says Seth.

As my friend, client, and business consultant, KC Ramsay reminds me, beliefs about investing and wealth are extremely difficult (if not impossible) to change. I could talk until blue in the face about the logic of what I know to be true, but unless we shared similar beliefs about investing, we would be wasting each other’s time in a hopeless pursuit.

Logic, even solid facts do not readily change beliefs. Beliefs are based on trust, faith, or confidence in someone or something. People of differing beliefs can view similar facts from radically different perspectives formed by their experiences and teaching. With investing or any serious human endeavor, the surest foundation for success begins with a common belief or worldview on the subject.

At Beacon we believe that people invest to accomplish serious goals. We believe some goals are of tantamount importance, while others may be compromised, if necessary in order to maximize goals of higher priority. We believe that people are rational and prefer to take no more risk than is required to meet or exceed their goals with confidence.

We believe that the capital markets, efficiently harnessed, offer sufficient returns without enhancement to provide the wealth necessary to confidently meet or exceed goals. We believe that today’s investment industry actually increases uncertainty through practices that force investors to save more, work longer, take more risk, delay goals, and abandon dreams.

Beacon exists to provide our clients an alternative to the status quo, to empower people to live more abundant and purposeful lives, rather than clouding their futures with needless risk and uncertainty. We believe that by minimizing taxes, needless expenses, and under-market performance we can exert considerably more control over the investment process and save major portions of our clients’ wealth over their lifetimes.

We believe the capital markets are uncertain and that the future is unknowable, so we continually stress-test our clients’ planned cash flows against all kinds of markets to ensure confidence of meeting and exceeding every important goal they value.

These ‘facts’ are obvious to us and to our clients, but we realize that many have differing beliefs about investing. I started our Friday Brief ten years ago as a weekly newsletter highlighting the events and issues that we felt most impacted our clients’ investments. Today our Brief speaks not only to our clients, but to a broader audience of friends, business associates, and professional partners. With our increased readership comes the likelihood that there may be more than a few of you who remain skeptical of our approach. Let me first thank you for reading, and second, invite you to add your comments, questions, or arguments as you think appropriate.

There are two ways to make your comments. One is public where your comments appear at the end of the Brief you commented upon. It can be accessed by clicking on the “Comments” link at the top of each Brief on our website. Your comment might start a conversation that we and others could join as we share the experiences that have shaped our beliefs.

If you have a question or prefer a private conversation, simply add it to a reply to the email used to announce the Brief.