Beating the average is “not” about finding the best of the best winners every year! It is about avoiding the clunkers. (Remember Buffett’s two rules!!! The secret is buried in there when you understand what he was saying.)
Winners are harder to find. But losers? Some are hard to spot and others stand out like a sore thumb. These deadbeats will break the Buffett rules and put you in the position of catchup. Hard to beat the indexes coming from behind.
Assumptions abound. Planning for retirement has more what-ifs than you can shake a fist at. If you begin your wealth building journey as assets bounce from a low, advancing for years, you have an advantage.
Jack Bogle gave us the index fund. Warren Buffett has said most people should put their money into index funds.Personal finance bloggers—especially in the FIRE* community—spout “index fund” like it’s a nervous tick. And you might have noticed this blog has the same nervous tick.Some are worried about all this index fund investing. The concern is index funds will control so much of the market that it will lose its efficiency. I remember the same concerns in the 1990s when I was a stock broker about mutual funds in general, most of which were actively managed.Index funds will not break the market any more than actively managed mutual funds did. For one, there will still be plenty of people investing in individual stocks. And the hedge fund guys will do their share providing liquidity.
I’m going to start an investment company. Actually, I’m going to start a whole bunch of’em. Anyone interested in throwing in with the Wealthy Accountant? Read on if you think I am a good investment risk.
As an accountant I don’t want to leave anything to chance. People invest in firms with proven track records that exceed the norms. Therefore, my investment company will start several investments with only my money at risk. Several different strategies will be used to see which ones outperform. Underperformers will be closed without any investor money put at risk.
Before you start shedding tears for me, know I only invested a token amount into each fund. My loses were small and so were the gains. I just needed to know which ideas worked best.