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Step 3: You can't beat the market |
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- The next theme is the advantage of passive or indexed investing in equities.
- Our site identifies studies which have convinced us (but, here as elsewhere, it is up to you to decide) that an individual investor without specialized expertise can rarely “beat the market” for shares, neither directly by the choice of specific securities nor by the selection of the “right”
 mutual fund. As a result, our site suggests that you beware of any person who claims that the purpose of a particular security will permit you to “beat the market”.
- On the other hand, if an investor is hesitant to solely invest passively in securities (he does not find it interesting enough) or is convinced on occasion that he has discovered a certain security which will double in price in a short period of time, or (for whatever other reason) our site proposes the concept of “pocket money” in order to permit alternative investing within quantitative limits which we recommend in order to avoid excessive risk taking.
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Last Updated ( Wednesday, 09 January 2008 )
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Quotation
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The idea that a bell rings to signal when investors should get into or out of the stock market is simply not credible. After 50 years in this business, I do not know of anyone who has done it successfully and consistenly. I don’t even know anyone who knows anybody who has done it successfully and consistently. Yet market timing appears to be increasingly embraced by mutual fund investors and the professionnal managers of portfolios alike. John Bogle. |
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