You probably don't believe me. You probably think that successful investors have impressive IQs and "whizz kid" math brains. Some do. But, believe me, most don't.

The common thread among most successful investors is far more mundane than that. What they have is discipline and an ability to conquer their emotions. Or as Warren Buffett puts it, "To invest successfully does not require a stratospheric IQ, unusual business insights, or inside information. What's needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding the framework."

If you're still skeptical, think for a moment about poor Sir Isaac Newton, one of the most intelligent and influential men in history. Newton may have built the first refracting telescope, laid the groundwork for classical mechanics, and developed differential and integral calculus...but he didn't have much luck when it came to investing.

In 1720, Newton owned shares in the world's hottest stock, the South Sea Company. Claiming that he "could calculate the motions of the heavenly bodies, but not the madness of people," he sold his South Sea Company shares for a 100% profit of £7,000 (about $1 million in today's money).
So far, so genius...

But Newton, despite all his intellectual prowess, lacked the ability to keep his emotions in check. Just seven months later, swept up in the speculative mania surrounding the South Sea Company, he bought back into the stock...and lost £20,000 (or about $3 million in today's money).

What Newton didn't "get" (oddly enough for the world's most renowned physicist) was the pendulum-like nature of the markets. That excesses in one direction in asset prices inevitably lead to excesses in the other direction in asset prices. Newton's tale is a constant reminder to me in my work helping families and individuals preserve and grow their wealth.

As Buffett's mentor, Benjamin Graham, put it, the one risk you can never eliminate is the risk of being wrong. But you can minimize this risk by subjecting your investments to a disciplined framework, such as the one we have developed for Bonner & Partners Family Office. This includes a well-diversified portfolio, a proven market-timing system, and quarterly reviews only of the core portfolio.

This may not sound sexy. But if Newton had used such a framework, while he may have missed out on his £7,000 profit on his South Sea Company stocks, he would certainly have avoided his crushing £20,000 loss.
According to a history of the South Sea Bubble, for the rest of his life Newton forbade anyone to speak the words "South Sea" in his presence.