OK, I’m now taking my own version of Investing 101, by reading the following key texts
- The Four Pillars of Investing: Lessons for Building a Winning Portfolio by William J. Bernstein
- A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing by Burton G. Malkiel
Wow, was my first though after reading them – there is so much I need to learn and take in – I knew I was a novice, but after reading these I’m realising how much more there is to understand.
My eyes have really been opened – and some previously held beliefs have been really challenged
- Beating the market is a myth – very few people actually achieve this on an ongoing basis
- Beware fees and charges
- Financial advisors are salesmen – pure and simple – their aim is to separate you from as much as your money as possible
- Managed funds have high charges, and don’t beat the market
- Be realistic when evaluating company values
- There are loads of tricks and accounting scams that have been used over the years
- Watch out for the bubble….don’t get sucked into buying the latest version of tulip bulbs
My investment philosophy has really changed, and now understand I am not intelligent enough to beat the market, so I should just track them – the markets are inherently efficient.
I’ve now rearranged my meagre investments into low cost index funds.