Words of a pastor that echo Derek’s ; fit for a Sunday morning after Easter
The following beautiful comments from Derek Scott are worth reading several times
The Scots would say “nae wise” of someone acting without sense — which fits much of today’s investment orthodoxy.
PensionsOldie, meanwhile, shows what real wisdom looks like: steady, high single-digit returns earned with patience, not adrenaline.
Prudent trustees once managed investments sensibly for income and stability.
Then came the accountants, actuaries, bankers, and regulators — my own former profession among them — who turned “prudence” into paperwork.
“De-risking” became a gospel of caution, assuming unmet income requirements could be replaced later with new capital.
A strange kind of prudence that values process over outcome.
True prudence — foresight and good judgement — has been lost in a shuffle between compliance documentation and fanciful modelling.
We call it safety, but it’s often cowardice.
Modern Portfolio Theory sealed the deal. Clever maths, yes — but its advocates turned “risk” into statistics and forgot about context, behaviour, and purpose.
Diversification and risk-adjusted returns became ritual, not reason.
We’ve risk-adjusted ourselves into mediocrity.
Real prudence demands courage: the willingness to act wisely, not hide behind models and red tape. That’s what the old prudent trustees understood — and what most of us seem to have forgotten in this age of “risk management.”
Here are the equally sagacious thought of Pensions Oldie, another Scottish accountant I’ll be bound!
The problem throughout the UK investment culture, whether that be in pensions (occupational or personal), ISAs, or other long term savings vehicles is that risks (usually short term) are over-emphasised compared to the opportunities.
The most outrageous case is the demise of DB pensions where the legislative and regulatory background is entirely focused on failure and ignores the potential contribution that investment returns will make over the longer term. If you told employer sponsors in 2021 that they could expect to achieve an investment return of between 6% and 8% p.a. over 5, 10, or 15 years (which is what has consistently been achieved by an appropriately invested fund), they would say “but the Pensions Regulator expects us to lose 2% p.a. over the duration of the liabilities and is forcing us to divert resources from our productive enterprises”.
I am off to invest my £20K annual ISA allowance, where my self select stocks and shares ISA has achieved a net investment return of 7.9% p.a. over the past 29 years and my other ISA fund using an asset manager has achieved 7.6% p.a. over 24 years. My passively invested in equities SIPP has achieved a net investment return of 9.47% over 10 years, partly due to minimal management charges (currently 0.23% p.a.). All measures are to the 31st March 2026 and reflect the headline making market conditions at that date.
I am fortunate because of my background and experience I am able to perform these calculations for myself and I am able to devote some time each day to the management of my investments (which is almost entirely on a buy and maintain basis). I do pity the novice investor faced with the barrage of risk disclosures blinding them to the opportunities of long term investing.
Both comments are in reaction to a blog I posted on “de-risking and prudence“. There are other fine comments there besides.