Best Investment Strategy

VeriPlan is the Best Financial Planning Software for Individuals

Personal investing seems incredibly complex, but the best investment strategy also tends to be a more simple investment strategy

The complexity of personal investment management is driven by the nature of investing in securities that have uncertain and unknowable future values. Nobody — amateur or professional — has a working crystal ball that can predict future asset values. Anyone can have a more or less well-informed outlook and operate with an evolving set of theories as to what might happen.

However, it is what actually unfolds in the future in terms of positive and negative economic, technological, competitive, political, and other developments that will determine the evolution of securities values. And, even as new information becomes known in the future, the value of a particular securities will be always be an amalgamation of currently known information and a forward looking market consensus about the murky future.

In general, it is this very uncertainty that provides investors with opportunities (however unpredictable) to earn over time more or less than a market return on their invested assets. Investing involves varying degrees of risk and participants in real time securities markets buy securities at what they perceive to be a discount against their expectations for higher future values. They sell when they think current market prices exceed the future opportunity.

Thus, the uncertainty about the future drives much of the inherent complexity of investing. Everybody wants a magic system to beat the market and to do better than the other guy, but when you take the time to think about it, you realize that the future cannot be known until it arrives and that there can be no magic bullets, reliable systems, or sure bets with investing.

Nevertheless, the inherent complexity of investing is greatly exacerbated by the proliferation of investment products and services aggressively promoted by a securities and financial services industry that purports to serve your best interests. However, this proliferation of complex investment products most often seems only to serve the financial self-interests of the securities industry itself. Averaged across all retail investors, the high fees of the financial service industry dramatically reduce rather than help to increase retail investors’ net assets.

Personal investing can be simplified greatly by focusing only on valid strategies that have support in the investment research literature. This personal investment planning summary is intended to help you to understand that you can manage your investments using strategies that have a demonstrated basis in the research literature.

When one pursues strategies that are designed to focus solely on the fiduciary interests of individual investors, the vast majority of investment products promoted by the industry can simply and easily be eliminated from consideration. They cost far more than they are worth. Aggressive investment cost control is not a magic bullet to beat the market, but it is a very effective way to avoid being the rube who gets fleeced by the fast talking slick suit.

Once you have committed to a durable long-term investment strategy, you can manage by yourself relatively easily the details of investment implementation. You do not need to pay high costs for something you can do yourself.

You can build an easy-to-manage, do-it-yourself, lifetime investment strategy based upon these principles:

Most people waste a great deal of time on investment activities, tactics, and strategies that are more likely to reduce rather than increase their investment portfolios.

Very low cost, professional index fund managers can manage your money far more efficiently in terms of much lower costs, far greater diversification, better returns, lower taxes, and significantly less time than you can ever realistically hope to do as a personal investment portfolio manager. Do yourself a favor and decide to fire yourself as a personal investment manager in favor of a handful of index fund managers running very broadly diversified, low cost funds.

Despite these factors, some people just cannot resist the personal investment management game. If you simply cannot resist the temptation to play personal investment portfolio manager, then understand clearly that this is likely to be one of the most costly hobbies that you could have. If you are anything like the average investor (and you probably are), then your self-managed personal investment portfolio is highly likely to cost you money through inferior returns, higher costs, and inadequate diversification. Moreover, this hobby is extremely likely to waste a significant amount of your valuable time over your lifespan.

However, if you must play investment manager, then never play with the rent money, the baby’s milk money, or the money that you are relying upon for your retirement, your kids education, or other important obligations. Since investment portfolio self-management is not likely to be a value-added activity, never allocate more than 10% of your overall investment assets to this hobby. Invest the remaining 90+% in accordance with the investment methods summarized above.

In addition, learn how to track carefully and accurately your investment performance relative to appropriate passive benchmarks, so that you do not fool yourself into thinking you have more skill than you actually do. Everybody is an investment genius in a rising market, if they do not track performance relative to appropriate passive market benchmarks. Academic research clearly demonstrates that individuals most often achieve significantly sub-optimal investment results relative to passive benchmarks, while simultaneously they carry higher and unnecessarily risks due to non-diversified self-managed portfolios.

You investments should work for you rather than you working for them. Avoid all the financial industry games designed to make money off of your assets and to keep you moving assets around chasing performance gains that have already passed you by. Instead, simplify your investment program, and use your financial assets to enrich and protect your life and the lives of those you love.

OK — So How Does One Go About Doing This?

Here are some ideas to get you going:

1) On the “Retirement Investment Calculator” front page of this website, you can read about VeriPlan, which is an automated personal financial planning and retirement savings calculator software tool that individuals and families can use to do their own lifetime financial plans. This lifetime savings and investment calculator is the most sophisticated and high quality financial planning software that you can buy at a great bargain price. VeriPlan automates all of the tedious calculations needed to do fully integrated lifetime financial planning in a manner that is customized to reflect your particular financial situation, all your financial resources, and all your financial life goals and objectives.

Furthermore, VeriPlan also provides very extensive and absolutely objective personal financial planning documentation that helps you to understand the lifetime financial planning process and how to use VeriPlan’s automated and fully integrated IRA investment calculator, 401k investment calculator, mutual fund investment calculator, and saving for retirement calculator functionality. While VeriPlan hides the complexity of millions of inter-related financial investment calculator operations, it also treats you like an adult!

VeriPlan was designed with the firm belief that smart, well-educated adults need and want well-designed financial decision support tools with sophisticated future value investment calculator functionality. If you are going to invest the time needed to plan your family’s financial future, you need a financial planning software “power tool” to help you. It must be highly functional and robust, while it also provides useful and entirely objective financial information.

2) In parallel with checking out VeriPlan, you might also want take a look at this “Financial Planning Reading List.” This reading list compiles the top 60 or so personal financial planning and personal investment management articles from the many hundreds that the designer of VeriPlan has published on various personal finance websites across the web. All of these “Financial Planning Reading List” articles were personally researched and written by the designer of VeriPlan. If you want to judge whether VeriPlan could be right for you, then these articles might help you with your decision. Furthermore, the more articles on this reading list that you read, the better prepared you will be to manage your own family financial planning and personal investment portfolio over your lifetime.

3) I do believe that it is a virtue to engage in a lifelong effort to understand economics and investments, because of the significant impact of economics and investing on our lives. Personally, I believe that this knowledge provides a very long-term economic perspective and allows one to rise above the constant pressure from the industry and the media to change something – change anything – with ones investments, without any rational reason other than to generate more revenue and profit for the industry, yet not for you.

The more one learns, the less one is inclined to jump from one currently popular investment strategy to the next. Stability, constancy, passivity, broad diversification, risk control, and very low costs have been the hallmarks of the most successful personal investment programs of the past. I have found nothing that makes me believe that these viewpoints should ever change.

Given these viewpoints, I have also determined that I will not pay additionally for any “special insights” from industry professionals. Paid insights are no better that the abundance of free insights. However, since they cost more, one is likely to end up poorer for having paid.
Therefore, I have decided that I will only use free resources. Everything I do relies upon free public information or at least information that is very, very low cost. One just has to learn how and where to look. Of course using only free or extremely low cost public economic and investment information, means I may have to wade through a lot of rubbish to find things that are useful and valid. However, that is far better than wading through a lot of rubbish for which I have paid very dearly.

4) Recommended journals and books

In addition to materials that I have published, here is a short list of my investment reading recommendations concerning other sources that I consider worthwhile. The online sources are all free. You could buy the books inexpensively on Amazon.

A) Journal of Indexing —  Back issues can be read online.

B) John Bogle’s book “The Little Book of Common Sense Investing” Go to “John C. Bogel’s Blog.” You can read the first chapter of his book online on his blog.

C) “Capital Ideas: The Improbable Origins of Modern Wall Street” (1993) or “Capital Ideas Evolving” (2007) by Peter Bernstein. These books chronicle of the intellectual development of modern investing.

D) Investment research papers via Google Scholar (To find investment research papers via Google Scholar, go to Google, click “more”, click “Scholar” and enter a search term. This takes time, but researching personal finance via Google Scholar can be very informative. For example, if you want to learn about forex trading online, (which is not a good idea for individual investors), just type in that phrase. With this example, you get about 2,700 research papers on foreign exchange and related forex topics. Once you get results, you can use Advanced Scholar Search to specify searching within particular subject matter categories and you can select particular authors who have many citations, among other search refinements. Look for most cited papers. Read abstracts, intros, and conclusions.)

After these recommendations, I have few additional recommendations, although I track and read a very wide variety of sources. The next book I would recommend is Ben Franklin’s Autobiography. I do not recommend many investment books, because I think that much more objective materials can be found in research papers on the websites of financial academics.

Comprehensive investment calculator and personal financial planning software is needed to develop a fully personalized family financial strategy

This free “financial freedom guide” on how to invest is just a part of our web site about how to develop a personal family financial plan. The personal finance plan essays on this free site supply important ideas to individuals and families about financial planning program and financial strategy subjects that should taken into consideration. These postings help in understanding how to establish a life time personal finance planning strategy. Also, to generate a really useful long-term money management strategy depends upon you using the best retirement savings calculator and personal financial planning software with a high quality stock investment calculator and the leading long term investment calculator software features.

Also, our financial freedom web site enables you to find the top all-in-one saving for retirement calculator software program for home PC use, and it includes the best retirement investment calculator tool, the best personal budgeting software, and a high quality mutual fund investment calculator for your personally customized lifetime financial planning. It also automates the long-term analysis of debts that you have, which could include mortgage debts, educational loans, credit card debt, business credit, or whatever other credit obligations you wish to analyze individually or jointly. Furthermore, it has an automated tool to assess an interest rate for your choice in situations where your financial assets are projected to have been exhausted, and you would use your other real estate or business assets as collateral for the personal or business credit loan you would need.

Personal Financial Planning Software for Individuals


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