3 ms·
Vanguard, VFINX. Keep it simple stupid. Study after study has shown how atrocious human beings are at actively managing an investment strategy. You can, litera
by hacknat 10y ago
Vanguard, VFINX. Keep it simple stupid.
Study after study has shown how atrocious human beings are at actively managing an investment strategy. You can, literally, count on two hands the number of people who have consistently beaten the S&P 500 over a period longer than 20 years (which is the time span that matters when you're trying to beat it). Why would anyone think they were one of them?
- rahimnathwani 10y ago“the number of people who have consistently beaten the S&P 500 over a period longer than 20 years” If someone is managing money for the long term, why would they care about 'consistently' beating the S&P 500 for 'longer than 20 years'? Shouldn't you care about aggregate, compounded returns, rather than consistent returns? Would you rather have annual returns like this {5%, 5%, 5%, 5%, 5%} or this {4%, 2%, 13%, 4%, 4%}?
- hacknat 10y agoI mean average compounded over 20 years, including inflation. Seriously, look it up. Almost no fund or person has done it. Everyone who has is a billionaire that you've probably heard of (Buffet, Soros, et al).
- cmdkeen 10y ago20 years in the same fund / strategy is generally a poor strategy, especially for retirement savings. That said investing for 20 years plus Early on your appetite for risk should be much higher but as you get nearer to your end point (generally retirement, but could be kids going to college etc) you want to reduce your risk exposure. Generally this is done by switching the balance of your portfolio more into bonds and low volatility equities.