As someone who's done all the standard investment reading with due diligence (Tim Hale backed up by Monevator), I have come to the conclusion that I need to explain to myself why I can't just follow the standard recipe for success (low cost passive trackers) but keep on being tempted to add a pince of this and a little of that.
Justifying this to myself is necessary because rationality dictates that I should sell up the large holding I have in my CIS actively managed fund (when it does arrives in II - 16 weeks and counting!!) and redistribute it across a balanced range of passive funds. The statistics are well researched and pretty conclusive. Active funds in general do not beat the market and any particular "top performing" active fund rarely beats the market consistently. Popular fund managers may well outperform for some of the time but there is no guarantee that they will continue to do so and the extra expense of buying active eats away at any extra profit anyway. Case proved.
Instead what I will probably do is to combine shifting a fair amount into the trackers I have already bought (Emerging Markets, Europe and FTSE 250) with putting more money into my Investment Trusts (Heritage - Specialist small IT and comms, Shin Nippon and Aberdeen Small Asian) and also into Fundsmith. In addition I'm likely to be keeping an eye out for likely vehicles for a couple of areas in which I feel under-invested - Europe and the USA (although admittedly I'll probably do this particular one via a tracker). Whatever I do end up doing I know for a fact that I won't be playing it completely by the book.
There is obviously a contradiction here. I understand that If I want to make a loaf of bread I had better follow the recipe. Put in too much salt and it won't rise, forget the yeast and you'll be left with a leaden biscuit. Once mixed, leave the whole thing to rise and do not disturb in the meantime. There is no room for "personalisation". Using passive trackers to make an investment "loaf" follows the same principles. Why do I think that I know better, or worse still, don't seem to care?
I think that most of the tension between what I know I should do and what I actually find myself doing comes from the fact that I believe I'm different from the norm. (Yes, don't we all.) This isn't because I think I'm cleverer, have some gift to pick the right funds or time the market, but I'm different because I have a DB pension waiting in the wings. My staple income for my future, my "daily bread" is already stacked up in the freezer ready for me to take out when I need it. Building a pension fund is not something you would want to mess with and luckily for me I don't get the opportunity to, as my LGPS pension is managed for me and the amount I will receive is guaranteed.
This doesn't mean that I have given myself carte blanch to be reckless. What I have done is allow myself to be "interested". The whole process will only work for me if I feel like I am having some sort of personal involvement rather than simply following a completely pre-set formula for success which involves throwing all the ingredients into the mix and waiting. Making bread is a particular type of "cooking" - it has an in-built proving time. Things happen slowly, with time as one of the ingredients. This is also true of passive investing.
What I'm doing is more like making a spicy stew to suit my own particular taste buds that will go along with that bread. So I have allowed myself to try a few ingredients of my own along with the staples, being aware of what I am doing and monitoring closely how things are going, tasting all the time and adjusting as required. I'm happy with that.