When you tell your bank, “I want to invest my money,” something very human usually happens. You are not really sold a strategy, you are sold a feeling. Someone in a neatly ironed shirt sits across from you, shows you a colourful pie chart, throws in a few English buzzwords, and suddenly “Opportunity Large Caps in Emerging Markets with Unique Asset Management” sounds as if you have just been handed the code to financial freedom. In reality the crucial question is almost never which fancy terms appear on the flyer. The crucial question is what costs you are actually paying for the privilege of having your money “parked” there, and who gets paid regardless of how your investment performs.

As a layperson you often feel that banks and funds must have a huge information advantage. “They have specialists, they know more than I do.” It sounds logical, but in practice it is usually an illusion. Almost every piece of information your bank has, you can now look up yourself within minutes online. The real difference is not knowledge, it is the system behind it. And big institutions struggle with two issues you do not have as a private investor.

The first is the conflict of interest. Banks often invest in or recommend their own in-house products, preferred partners, or whatever they are currently being told to sell internally. You do not necessarily get what is objectively best for you, you get what is easiest to market. While you believe people are working in your best interest, there is a glossy brochure in the foyer next to the decorative fountain and the freshly dusted plastic plant, carefully designed to create exactly that feeling of safety and professionalism. Someone pays for that branch, that marketing, those salaries and those commissions. Spoiler: that someone is you.

The second is a lack of flexibility. A fund manager who has to move millions or even billions is often as agile as the Titanic trying to change course in front of an iceberg. You, on the other hand, sit in a speedboat as a private investor. You can change positions within seconds. You are not forced to stay invested “somehow” because of volume, internal rules or regulatory constraints. That flexibility is a genuine advantage, provided you have a clear and consistent system to guide you.

Now comes the part that sounds funny at first but is unfortunately quite true. There is research that essentially shows monkeys can be more successful on the stock market than professional fund managers. Not because monkeys are financial geniuses, but because the cost structures of actively managed funds are often so heavy that a random basket of shares, picked without any intelligence at all, ends up performing better than what is sold as “professional management”.

These costs are not a side detail, they are the core of the problem. A very typical real-world example looks like this: a five percent front-end load, two and a half percent annual management fee, half a percent in transaction costs, plus hidden fees. Total costs of more than six percent per year are absolutely possible in some products, completely independent of performance. Translated into plain language, even if the market rises, there is a real chance that very little of it ever reaches you, because the fee machinery gets paid first.

Now comes the part that hurts a little but is important. Back then I took three funds from large banks and compared their three-year performance with the DAX. I deliberately left out the names because I had no interest in receiving letters from lawyers, so let us just call them Fund 1, Fund 2 and Fund 3. Over that period the DAX returned about 27.5 percent. Fund 1 managed 15.56 percent. Fund 2 achieved 21.52 percent. Fund 3 actually lost money and stood at minus 7.47 percent.

And because you are probably thinking, “All right, but those were just three unlucky products,” I added another little experiment. I typed “best fund right now” into Google and clicked on the first result. A list of 65 funds came up. Not a single one of them came anywhere near that 27 percent in three years. Not one.

This leads to a thought that has stayed with me ever since. Back then there were roughly 13 million investors in Germany. About 10 million invested via funds, only about 3 million chose individual shares. At the same time the simple alternative lies so close that it is almost cheeky. An ETF is a passively managed basket of stocks that is set up once and then not constantly “rebuilt”. Because of this, the ongoing costs are usually very low, often around 0.5 percent per year, and you can use them to represent entire indices or sectors in a very broad way.

Does that mean you should now blindly buy ETFs and be done with it. No. It simply means that if you want broad diversification, you do not necessarily need expensive, actively managed products for that. And if you prefer to own individual companies, you do not need a bank that makes “magical” decisions for you. You need a system that helps you avoid confusing the price of a share with the value of the underlying business.

This is precisely where the Fairvalue Calculator begins. As soon as you get used to asking “What is this company roughly worth?” instead of “What is the share price doing today?”, speculation turns into a process. You no longer make decisions because someone is speaking convincingly or because a chart looks exciting at the moment, but because you have a logic you can explain to yourself. And yes, if you apply that consistently, the chances are quite good that one day it will be your bank advisor with the surprised look on his face, as we like to say in Austria.

In the chapters that follow I will show you how to think about fair value in practical terms, how to reduce risk, and how to use the tools on fairvalue-calculator.com to automate most of the work. And before you ask: no, you do not need to be a professional. You only need to be willing to treat your money as if it actually matters.