5 simple tips to invest wisely, stress-free and guilt-free
Investing should be steady and boring; it should not be a roller coaster or a rock climb. It should not induce stress, guilt, sweat, or regret.
You’ve been victimized by propaganda. You’ve been led to believe that all of those people who wear suits and ties and bring polished briefcases to their corner offices are a lot smarter than you and have some secret insights into the wild world of money.
Here’s the worst kept secret on Wall Street: most of them are not smarter or more insightful than the rest of us. Other than a select few legitimate geniuses, Wall Street is full of ordinary people.
Investing can feel scary or daunting or risky. That’s the result of decades of subliminal messaging you’ve absorbed from pop culture (hello Gordon Gekko) and Wall Street itself and maybe even your friends and family. You’ve been led to believe that you can’t DIY.
Here’s a little secret: you can, and you should.
Darts > professional money managers
Want some proof? Look at how active money managers (who spend all of their time trying to figure out how to best deploy money) perform relative to passively managed investments. Humans are terrible at picking winners and losers.
Nearly nine out of ten targeted (or actively managed) investment funds underperform their index (meaning the benchmark they aim to beat) over the long run. And they charge you a fortune for the privilege of doing far worse than you would if you passively picked your investments completely at random!
Imagine if you hired a personal shopper to find you the best clothes at an affordable price, but nine times out of ten, you would get better deals if you made your clothing purchases completely at random.
You could throw darts to pick your investments and still crush the ‘professionals’. Don’t tell them I said that.