In life, we all face moments when we are riding a dead horse. No matter how much effort we put in, the horse is not moving forward. Wealth management and investing are full of examples where investors and advisers continue to cling to what no longer works.
The Dead Horse Theory is a satirical way of exposing the absurd behaviours we fall into. Instead of accepting reality, we invent ways to avoid it.
Investors replace one fund manager with another, believing fresh leadership will solve the problem. Yet the system itself is flawed. The idea that someone can consistently beat the market is a dead horse.
Big wealth firms create investment committees and risk oversight boards. To clients, it looks robust. In reality, they are just circling the problem of high costs and inconsistent returns. The horse is still dead.
A shiny new fund, ESG label, or AI-branded product gets launched. It looks different but delivers the same tired outcomes. The saddle may sparkle but the horse remains lifeless.
Clients are told “you have not lost money until you sell” or “this fund is just in a rough patch.” That is just shifting language to avoid facing the truth.
Real wisdom in investing is not about finding clever ways to fix what cannot be fixed. It is about stepping off the dead horse and moving on. That means:
~What financial dead horses are you still riding?
~An adviser who costs more than they add?
~An investment strategy that never delivers?
~A belief that someone has the magic formula to beat the market?
The first step to building a healthier financial future is the courage to dismount and choose a path that is alive and fruitful.
Nic Round is a Chartered Financial Planner and Chartered Wealth Manager, authorised and regulated by the Financial Conduct Authority.