Last week, this column looked at the limits of an over-optimised worldview, and the ways randomness and uncertain exploration can bring unexpected benefits.
Since then, I’ve been thinking about the many ways the investing industry takes an engineer’s approach to the challenge of wealth building. Want the best returns, on average? Then stop thinking you can beat the market and put it all in a low-cost tracker. Lower volatility? Throw in some geographical diversification. Less risk? Tilt to bonds.
These are very reasonable solutions, which are also, roughly, how many pension funds are managed. And for those without time, resources or the stomach for setbacks, there’s a lot of comfort to be had in following the evidence. If investing holds zero interest or feels like a flawed attempt to anticipate an unknowable future, then delegation is a sensible response. Fortunately, the UK has a pretty big service industry to cater to that demand.