Driving fast cars is very much like investing in the stock market

Dear Reader,

I was always a big fan of the muppets (God knows I have worked with enough of them over the years).  I particularly liked Sesame Street; after all it is where Mario Draghi used to work before he got the ECB gig.   I have fond memories of watching it back in the early 2000's at 3 am with one of my 3 insomniac infants and seeing Big Bird tell me the show was brought to me by the letter M, X, Y or whatever.

This week I have been lent a BMW M6 Gran Coupe by a friend who is big  in chicken (its a long story but sometime it will be well worth telling).  Normally I am not a big fan of German cars they always seemed 'functional' but fast - I much prefer Alfa Romeo as it really is a pure driver's car.  As a side note who the hell at Mercedes thought it was a good idea to put a gear stick on AMG's where the windscreen wiper should be?

I personally had no idea what an M6 is (or for that matter M3, M4  etc)  I just assumed a higher M number meant a better car..   The M6 is insane. If you get a chance to drive one do.  I have never seen people look up so much as I drove past. Perhaps it was me being in sports mode and making the gear box sing for its supper but it is one of the few cars I have driven where it actively put a smile on my face.  0- 60mph in 4 seconds and 190 mph top speed.

Anyway to the point of today's brief note.  Funds are like cars.  ETF's are Ford Mondeos. They cost less and do what you want but don't give much more back than you really expect.   Bond Funds are like Volvos. They cost a lot to initially buy but will then trundle along safely and efficiently (unless of course its a Woodford). Emerging Market funds are like Mini Coopers. They dart all over the place aggressively and are a bit like driving a rollerskate on crack.

Highend executive cars like M6 Audi RS6 etc are like bluechip funds to me. You know they can cost more but you also know you are going to have a smile on your face. 

To put this in real money terms if you had bought an Ishares FTSE tracker vs Fundsmith you can clearly see which one would make you smile more.  They both will get you where you want to go eventually.

As with everything I say it is important to have more than one car in your garage. Diversification of risk is the key to having a smile on your face.

On that thought and the sudden realisation that I am actually a complete petrol head I wish you a pleasant day out there

Don 'I am an Alfa man' King