When you invest some money, have a personal goal for that investment and don't worry yourself about how it compares to the investments of others.

That is the advice of Jack Brennan, chief executive officer of Vanguard, the biggest mutual fund provider in the US, with a staggering $1.3 trillion of assets under management.

Speaking after the Bermuda Investment Forum presentation by his company at the Fairmont Hamilton Princess yesterday, Mr. Brennan told The Royal Gazette that if there was one piece of advice he would give an investor, it would be "to have a plan for your money".

"You should have a plan just for you, not just follow what your friend or neighbour does," Mr. Brennan said. "Investing is highly personal.

"Also you need to ask two things. How long do you want the assets to be invested for? And how comfortable are you taking risks?"

He suggested that trying to be too safe with investments could be counter-productive.

"Don't be afraid to take risks," Mr. Brennan said. "Sometimes people are too conservative. Risk can be good thing, if you have time to make it work in your favour. There is nothing free in the markets."

With the US stock market having climbed dramatically in recent years, but the US economy slowing down, would Mr. Brennan advise investors to get their money out of equities now?

"There will inevitably be pullbacks in the market, but that's why we prefer to take a long-term view of investing," he said. "That is the way our asset allocation is set up.

"That's where people often go wrong — they look at how well the stock market is doing and say, 'I want to be involved too'. But you should not get euphoric when the markets go up or upset when the markets go down. If you pull out and miss even a handful of good days, it's remarkable how poorly your investment will perform. Timing the market is a fool's errand."

Vanguard has decided against putting money into "alternative investments" such as hedge funds, which are run by managers who thrive on event-driven, risk-taking opportunities, taken by managers who command high fees.

"Low cost is a core strategy at Vanguard and hedge funds do not pass that test," Mr. Brennan said. He added that it was too early to say whether hedge funds were having a positive or negative influence on the markets.

"I would say we won't know that until we have gone through a full cycle," the CEO said. "One of the positives is that hedge funds are taking a large amount of risk in the markets away from people who don't want risk.

"How much leverage hedge funds have in this economy — that could be a worry. But it will be some time before we know their effect."

Dennis Duffy, a principal in Vanguard's International Group, said the company had some 30 Bermuda clients, including Butterfield Bank and HSBC Bank of Bermuda, with an aggregate investment of almost $1 billion.

Its US business is shared roughly half and half between institutional and individual investors — but its overseas investors are almost exclusively institutional. He explained that Vanguard's philosophy was based on the long term.

"We tend not to be 'trendy'," Mr. Duffy said. "In the late 90s, we had many requests to set up a technology, internet or Nasdaq fund. At the time, it was what we called a 'hot sector'. We decided not to do it and, in retrospect, that was a good decision."

In his speech to assembled clients, Mr. Brennan, the author of "Straight Talk On Investing: What You Need To Know", spoke about measuring the performance of investment managers and how many benchmark comparisons were futile.

Investors had more ways than ever to compare performance and the industry was becoming "mired in comparative metrics", Mr. Brennan said.

He recalled the example of a particular large-cap, deep-value fund, which had earned him numerous complaints in the late 90s because it had underperformed the market by some 14 percent. Over the past ten years, the fund, which stuck to its core principles, had outperformed the markets, meaning those who stuck with it had profited.

Success could be measured only by the individual investor, he added. "I heard a story about people who lived in Boca Raton, who were asked: 'Are your investments outperforming the markets?'" Mr. Brennan said.

"Some said 'yes', some said 'no'. One man said: 'I don't know, but it's done well enough to allow me to retire in Boca Raton'."

Mr. Brennan said "it would be irresponsible for funds not to have any yardsticks", but believed that the point of investing was to meet investors' goals, rather than to compare well with benchmarks that were often irrelevant.