Investing 101

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

4 Pillars       Random Walk

 

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.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s