This is not my story. It was first shared by Jun Qi during the UT/ILP Investment Sales Master Class for a group of advisors from Synergy FA in January 2022.

The 3 little pigs made their way into the wider world of investments. When it came to building their house, the eldest brother chose to use straw. It’s faster using straw and so he could rest for longer he thought. His younger brother used wood. It takes slightly longer, he thought, but wood is stronger than straw. The youngest piggy set out wanting to build the strongest house. He took his time and built a brick house.

In all stories there is a bad guy. Yes, the big bad wolf.

It took the wolf one puff to blow down the straw house. With the wood house, maybe 2 to 3 puffs. At the brick house, he huffed and puffed but couldn’t blow it down. A one-year investment horizon is like a straw house. For any 10 days the piggy is staying in the house, on any 4 days there is a chance the wolf blows down his house and gobbling him up. Three-to-five-year investment horizon is like a wood house. Stronger yes but, still 2-3 days out of the 10 days there is the risk of being eaten up.

The best investment is like building a brick house (investment horizon around 10-years). It takes more time, and it will be stronger. There might still be leaks here and there, but you can mend it and you won’t be eaten up.

This lesson should be learnt early on in your career as a financial advisor as well as an investor.