Learning about personal finance and investing
The investment strategy that I always suggest is a “completely passive, globally diversified, always invested, never switch to beat the market” investment strategy. This kind of investment strategy is a very low maintenance investment strategy. From many respects, you set it, and you forget it. Except for:
the need to pay expenses exceeding current income, rebalancing to maintain the risk exposure of your portfolio, or some gross and unforeseen failure on the part of a fund to track its index properly,
there is no need to move in and out of investment funds or to move in and out of the market in any attempt to do better than the market.
If you have any desire to stay tuned to informative economic and investment information, I understand, appreciate, and share that desire. One of my goals over the past decade has been to understand the sources of available financial and investment information. However, I have reached the conclusion that 99+% of the financial information that is easily available through the media and the Internet is:
self-interested and biased, superficial and non-implementable, historical in nature or just current “noise” reporting without any actionable utility, and/or poorly researched, just plain wrong or unmitigated rubbish.
This paucity of genuinely useful information is understandable. The investment research literature provides no assurance that anyone has any real predictive insights to allows them to beat-the-markets or time the markets reliably and consistently over the long term.
However, 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 investment upon 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.
On the contrary, I believe that 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.
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