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Abu Dhabi, UAESaturday 15 December 2018

'I retired at 48, but I still wish I'd made smarter investment choices'

Retired accountant David Cox, who lives off rental income and has recently adopted the Bogleheads method of investment, now questions the validity of funds he invested into via a financial adviser

David Cox now invests in low-cost index funds.   Satish Kumar / The National/
David Cox now invests in low-cost index funds. Satish Kumar / The National/

David Cox has made some prudent financial decisions.

After all, they helped him retire at the age of 48. But he now thinks he could have planned better.

Mr Cox attended the basics of Bogleheads talk and says he was always good at saving, but he did not start investing in the type of investment the UAE Bogleheads Chapter promotes – index funds – until very recently.

“Some of the things that I am listening to here, I have just spent three years procrastinating, sitting on a bunch of cash and not doing anything with it,” says the Briton, who retired last December from his career as an accountant, and recently attended a Bogleheads talk on simple investing.

“I have done something in the last month or so, but I have missed out on 12 per cent [growth in the markets] per annum. That’s daft, and so if I had come three years ago I think I would have been smarter.”

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Nevertheless, the Dubai resident now owns four Vanguard funds – one low-cost FTSE 100 option; a FTSE 250 fund; a worldwide fund; and a high dividend fund, which he plans to now hold for the long-term. He also owns properties that provide him with an income through renting the units out.

But in addition, he has invested in other funds on the advice of a financial adviser, and now plans to scrutinise his latest statements to check the fees and charges. Bogleheads say investors should keep the cost of funds below 1 per cent, and preferably around 0.5 per cent.

“I probably have about 10 or 20 different funds. But is the financial adviser making money for me? I’m sure they are trying to make money for me, but am I first, or are they first in the equation?” says Mr Cox, who has lived in the UAE for 12 years.

“I want to come out of that if I can and buy Vanguard Funds, still stick it in that tax efficient structure, but just leave it now for 10 years. If it goes down, leave it. It will go back up.”