I’ve been playing squash for a COVID shortened year - my official match record is 0-3. I attribute my dismal results to my inability to hit a backhand volley. My paucity of match play is due to the fact that the weekly round robin starts at 6:30pm on Friday night which is approximately 3 hours after the beers generally start flowing.

I train every Wednesday morning with my 81-year-old coach, and while less mobile than he was in his heyday, he can put the ball wherever he wants. It’s a winning strategy, and he constantly reminds me that the success of his approach isn’t because he is past his prime. Hitting it away from your opponent works far better than simply hitting it hard. Focus on what works and avoid what is popularly perceived as the pathway to success. Sounds like a formula for achieving your investing goals.   

“If the only tool you have is a hammer, you tend to see every problem as a nail.” 

-        Abraham Maslow 

Many people are only aware of the final line of Maslow’s famous quote. But the full passage from his pioneering work, The Psychology of Science, is more enlightening. He writes, “I remember seeing an elaborate and complicated automatic washing machine for automobiles that did a beautiful job of washing them. But it could do only that, and everything else that got into its clutches was treated as if it were an automobile to be washed. I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.”

I’ve been thinking about this quote a great deal lately. The financial services industry is all about products.

Have an investing problem? Try this new, improved ETF which tracks a back-tested, newly created index. This investment would have turned you into a Rockefeller if only you identified the mega-trend of climate change back in the ice-age.

Want to achieve your goals? You need a trading platform specialising in Malaysian small caps where you are offered free trades in exchange for a usurious FX exchange rate.

As an investor, the notion of a company selling products to try and generate profits is not exactly something that gives me pause. As an investor advocate, I think most of these products should be avoided.

Shani and I will publish the 100th episode of Investing Compass on Sunday. We spent some time reflecting on the state of investing and our thoughts on the pathway to becoming a successful investor. And guess what? Not one product came up. As investors, you shouldn’t care about products. You should care about outcomes.

The problem is that many investors don’t focus on - or even know - the outcome they are trying to achieve. Many seem to have internalised the industry view that the answer to every problem is a product. Perhaps this is a result of great marketing. Perhaps this is a result of an industry that makes investing seem overly complex. Maybe this is just capitalism in a nutshell. All of those are plausible explanations. But I think it is more than that. I think that many investors spend their time arguing about the best brokerage platform to avoid the truth of the matter -they have no idea what they want to achieve.

To be clear, ‘getting rich’ or ‘having the most money possible’ is not a goal. And I don’t say that in a judgemental way. I say that because it doesn’t work. The goal of ‘getting rich’ or ‘having the most money possible’ is a pathway to internalising the investing equivalent of Maslow’s proverbial hammer. If you are simply trying to ‘get rich’, then logic dictates that you should always be in the best performing product. That is a perfect approach for an industry that wants you to trade as much as possible and give into the temptation of the compelling narrative attached to the newest ETF. Is the complicated automatic washing machine built to solve your investing problem?    

I humbly but confidently offer up the following advice. Define your goals and internalise them until they are your only investing focus. Approach investment products or platforms with a healthy dose of scepticism. Avoid the kryptonite of successful investing and resist chasing returns. Don’t let the siren’s song of investment marketing sway you from your path.

Listen to our podcast on Sunday and let me know if you agree with what Shani and I think makes a successful investor. Send me a note with your own stories about achieving your goals or simply criticise my overuse of analogies. Volunteer to be the fourth person to beat me in squash at a hour with less social conflicts.

I would love to hear your thoughts. Email me at [email protected]

Here is what is happening at Morningstar:  

Join me, Morningstar analysts and industry experts at the Morningstar Investment Conference for Individual Investors on the 13th of October. In person and digital tickets can be purchased here at a discounted rate if you sign-up for our watchlist.

Shani and I are pretty proud of hitting 100 podcasts. Our listener's favourites include our episode on goals based portfolio construciton, our take on passive investing and our three part series starting with swipe right for shares.