Do proactive investors get better returns?

Posted by Paul Sutherland on Tue, Dec 20, 2011 @ 09:55 PM

Proactive investorsThis is an important question that I’m often asked. When answering, I usually start by explaining what makes proactive investors different. In essence, they are investors who initiate change rather than just reacting to events.

In my opinion, strong proactive investors can perform better than those who merely react. This is because they aim to ‘time the market’ rather than just responding to it. A good example is when proactive investors sell an investment even though the crowd is still buying (for more on ‘timing the market’, please download our free Top 10 Tips for Successful ISA Investing).

What sort of returns have proactive investors achieved?

This depends very much on the individual, but as an example I would point to the returns made by my brother Stephen Sutherland. He is ISACO’s Chief Investment Strategist and a classic proactive investor. He aims to take charge of a situation by buying when everybody is selling, or selling when everybody is buying.

Stephen has been a proactive investor since 1997 and has been very successful to date. He has made a 13 year1 cumulative gain of 93.3% and an annualised return of 5.2%. This is particularly impressive when you consider that the FTSE 100 has returned 1% annual growth over the same period.

What’s more, in the last three years2 Stephen has also helped our clients make an annual tax-free gain of 19.8% versus the FTSE 100’s 8.2% per year.

Experience and knowledge are essential

Of course, being a successful proactive investor is heavily dependent on experience and knowledge. This can take years to acquire, so taking a proactive approach may not be for everyone. This is one reason why many investors still follow a flawed ‘buy and hold’ strategy and often make poor long-term returns as a consequence.

That’s why we launched ISACO in 2001. We provide a premium investment guidance service for ISA and SIPP investors with portfolios in excess of £100,000. This allows our clients to benefit from Stephen’s expertise as a proactive investor by emulating his trades and mirroring his returns.

In this way, they can achieve better performance over the long-term, better protection in falling markets and at a better price.

Better Performance:  19.8% per year versus the FTSE 100's 8.2% per year3

Better Protection:  Our aim is to protect your portfolio in falling markets

Better Price: We could help you save thousands in unnecessary adviser fees.

How to find out more

For more information, please download our free Investment Guidance Service brochure.


1 Performance period 31st December 1997-31st December 2010
31st October 2008 – 31st October 2011
31st October 2008 – 31st October 2011
ISACO investment performance verified by Independent Executives Ltd

Please remember that past performance should not be used as a guide to future performance. The value of investments can go down as well as up and you may not get back the amount you originally invest.

Topics: Investment strategy