3 important investing lessons you can learn from James Bond

Six decades ago, cinema audiences met a character who would become one of the most enduring and well-loved fictional heroes of all time.

Arriving in Jamaica to investigate the death of the British intelligence chief, MI6 secret agent James Bond soon finds himself in the underground base of the evil Dr Julius No, a member of SPECTRE, the Special Executive for Counter-intelligence, Terrorism, Revenge and Extortion.

With the help of local shell diver Honey Ryder, 007 foils No’s plan to disrupt the Project Mercury space launch, ultimately escaping from No’s island and blowing up his compound in the process.

Six actors, 25 films, and 60 years later, James Bond has become a British institution, and the franchise is the fifth-highest grossing film series of all time.

Bond author and creator, Ian Fleming, specified Bond’s salary in the 1955 novel Moonraker to be £1,500 a year – around four times the average salary of the time. Of course, 007 also frequently spends his employer’s money, whether that’s on caviar, vodka martinis, or casino chips!

To celebrate the Bond films’ 60th birthday, here are three lessons about investing that you can learn from the iconic spy.

1. Taking a little bit of risk can reap rewards

It would be fair to say that James Bond has taken a few risks in his time. From fighting a henchman atop a Rio cable car to escaping the KGB by riding a cello case, 007 has found himself having to take calculated gambles on a regular basis in order to meet his goals.

Let’s face it, he was never going to stop Blofeld by erring on the side of caution!

When it comes to meeting your own goals – whether that’s to enjoy a Bond-style globetrotting retirement, buy that Aston Martin you’ve always dreamed of, or simply to plan a prosperous future for your family – it’s also likely that you’ll have to take some measured risk.

Staying too cautious, such as keeping your wealth in cash rather than investing it, can hinder your progress towards your long-term goals.

Here’s an example.

The table below compares the returns of investing in the UK stock market (as represented by the FTSE All-Share index) with dividends reinvested, and the returns of investing in cash deposits with the interest reinvested, between 31 December 1999 (just after the release of The World is Not Enough) and 31 March 2022.

Source: FE fundinfo. Data as at 31 March 2022.

You can see that keeping your money in cash resulted in an annualised return of 2.4%, while investing in UK equities generated an annual return of almost double that.

Of course, the value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

What this does show is that taking a little bit of risk can help you to reach your long-term goals. And, of course, a well-diversified portfolio with the right balance of investments – something we can help you build – is less risky for your future than bungee jumping off Switzerland’s Contra Dam.

2. Things generally work out in the end

During the course of his missions, James Bond ends up in a fair few sticky situations. Tied to a bench by Goldfinger with a laser set to cut him in two. Poisoned by Le Chiffre in the Casino Royale. Trapped in SPECTRE’s volcanic lair.

There have been countless times where it seems that all is lost, and that there is no way out. But, what these films have taught us over the decades is that, by the time the credits roll, things will have worked out pretty well. James Bond will return!

While a dip in the stock market might be less of an immediate concern to your wellbeing than stopping a nuclear explosion, it’s always worth focusing on the long term. Remember that, while things may occasionally look bleak, they normally work out in the end.

Research from Nutmeg shows that the longer you hold an investment, the less the chances of you making a loss.

Using global stock market data between January 1971 and December 2021, if you had randomly picked one day during this period and chosen to invest just for that one day, you would have had a 52.5% chance of making gains — almost the same odds as tossing a coin.

If you had invested your money for a quarter, or 65 days, during that same period, your chances of making a profit increased to 66.1%. Investing for any one year would have generated a positive return 72.7% of the time, while investing for 10 years increased your chances to 94.15%.

Investing for around 14 years or more reduces your chances of losses to zero.

So, while there may be moments during your investing journey that things seem bad, focusing on the long term and being patient can be a constructive strategy.

3. Working with trusted partners can add value

While 007 often uses his guile and charm – or one of Q’s clever gadgets – to escape his fate, help often comes from a variety of sources.

Take Bond’s friend Felix Leiter, the CIA agent who has helped 007 out of sticky situations in 10 of the films. Then there’s Moneypenny, forever an ally to Bond whether as M’s secretary or as a field agent. And, of course, our hero frequently finds himself assisted by the film’s female lead, whether she be a shell diver, an astronaut, or a nuclear physicist.

When it comes to achieving your goals, working with trusted experts can add huge value. While we might not be able to pilot a space shuttle or lead a team of aviators, our expertise and experience can give you the peace of mind that you can achieve all you want – whether that’s to retire early, support your family, or start your own business.

Get in touch

To find out how we can help you to succeed in your mission – whatever that is – then get in touch. We can help you to retire earlier, work less, enjoy more family time, create a legacy or simply to grow your wealth.

Email info@wkmwealth.co.uk or call 0116 403 0138.