Investing is Simple… It’s Just Not Easy
22 Jun 2016
You really need to say this a few times to understand the point. Investing in of itself really is simple. Here is a look at how simple it is:
1) Start as early as you can (time value of money)
2) Invest as much as you can (you can’t really over save can you?)
3) Invest in as many different investments that you can find (diversification)
4) Leave them alone for as long as you can (see #1)
5) Don’t watch them very often and ignore distractions (Greed and Fear)
Well, there you have it! The recipe for a successful investment plan.
In reality, we all know it does not always work out this way. If it did, the statistics would bode a lot better for retirees today. Life kind of gets in the way. It’s NOT about standard deviations, expense ratio’s, ratings, beta or alpha; it’s actually about job loss, sickness, divorce, taxes, greed and fear. Our lives complicate all of this and make it difficult.
Remember we often need to get out of the way of ourselves and let the investment process take care of itself. I once heard a fellow investment professional say, “We don’t have people with investment problems, we have investments with people problems.” I couldn’t have said it better myself. Let’s all try to simplify this and make it a bit easier and along the way make it more fun
Good luck! Jeff