Investor Snapshot - Kirsty Bowman-Vaughan, Chief of Staff - Pension Protection Fund

What was your first experience of investing? 

My first experience of investing, was like most people, into my pension. But also like most people, I had no real concept that I was investing. I just left it in the default fund, which was far too risk averse for my age. Once I realised I should probably do something about it, I looked at the range of funds available and felt completely overwhelmed– so many acronyms, so many compound words. What did it all mean? And now if I made an active choice, what if I made the wrong one? Faced with complexity, again like most people, I buried my head in the sand.

Has there been a person or resource you have found most helpful in your investment journey?

The website monevator.com was invaluable to me as it introduced me to the simplest strategy I could follow: passive investing in a global index fund. Take the choice out, take the noise out, don’t assume you know better than the market and just set up a monthly direct debit. That’s it. And even better, the evidence shows it’s very effective.  

Have you had any investments that have performed extremely well or extremely poorly? If yes, what were they?

Let’s go with the extremely poorly ones – everyone finds company in misery. More than a few. Although I enacted my great strategy above, I’m also human and prone to all the flaws behavioural economics have been kind enough to name: loss aversion, recency bias, overconfidence (or thinking I can somehow predict the future). We are often our own biggest risks taking action when we shouldn’t and I’ve learned I can be susceptible to the siren call of “this time it’s different” when a market event happens. So I’ve put in place some guardrails: detach myself from the news when necessary, check my investments less often, and – my personal favourite – use platforms with terrible interfaces that make impulsive decisions just that little bit trickier

What’s next for your investing journey?

Helping other people to start. There’s a massive gap in the UK when it comes to everyday investing, and too many people are missing out on the long-term growth it can bring. The truth is it’s often the already wealthy who know the value of investing, and act on it. Without intentional support to change that, inequality will deepen and whole sections of society will be left behind.

That’s the macro, but onto the micro, for those that know me I am a broken record about this. And if you’re lucky, I’ll eventually wear you down – look at my PowerPoint deck showing the impact of long-term investing! Let me introduce you to my favourite compound interest calculator! Have no fear – just start, just a little, then forget! One day I’ll manage to wear all my friends down. It’s selfish really, who wants to retire early on their own?

What would you tell your 20-something self about investing? 

The potentially apocryphal fact I once heard, that if you save the same amount from the age of 20-30 and then stop, you’ll retire with the same income as if you saved the same amount from 30-60. Is that even true? Maybe someone smarter than me can finally let me know. But even if not, the story has stayed with me and speaks to the greater truth – start young!

This interview is for information only and it is not investment advice. It is for use in the United Kingdom only. Investments and/or investment services may not be suitable for all investors. Capital is at risk and past performance is not an indicator of future performance.