Google’s fleet of prototype self-driving cars has reportedly been involved in just 16 minor accidents over six years and 1.6 million kilometres of test driving.
Each of these accidents was reportedly caused by human as human-driven cars crashing into the driverless cars – not the other way around.
For the sake of accuracy, it should be pointed out that in one of the early accidents, a Google employee was actually in control of the Google car at the time. He braked for a pedestrian and a human-driven car went into the back.
Many astute investors aim to carefully create what could be termed the investment equivalent of the driverless car and then try not to become involved in making day-to-day changes to the portfolio. It’s a matter of getting the programming or the foundation of the portfolio right in the first place.
Such investors typically set an appropriate strategic or target asset allocation for their portfolios, invest within those allocations and remain focussed on their long-term goals.
As behavioural economists tell us, such a focus on our goals tends to discourage short-term, emotionally-driven investment decisions and a natural temptation to follow the investment herd. In other words, emotive, human-invention is discouraged.
Rather than trying to time investment markets, good investors tend to concentrate on things like ensuring that their long-term goals remain appropriate, rebalancing their portfolios back to their strategic asset allocations, minimising investment costs and maximising tax-efficiency.
In order words, like the programmers of the driverless cars, such investors set their destinations and aim to get there in a safe, efficient and disciplined way. And they don’t let human emotions drive them off the track.
 |
Robin Bowerman is Head of Market Strategy and Communication, Vanguard Australia. As a renowned market commentator and editor Robin has spent more than two decades writing about all things investment. |
|
