Blogs & Comment

Quotable guide to passive investing (XI)

Here is Part XI of the Quotable Guide to Passive Investing. Part I is here. To scroll through Parts II to X, click on links at the bottom of each page.
The Successful Investor TodayLarry E. Swedroe
The interests of Wall Street and the financial media are not aligned with those of investors.
Knowledge of financial history is critical to successful investing.
Adding international assets to a portfolio reduces risk.
“For the period 1995-2001, Morningstar funds rated ‘one star’ outperformed funds rated ‘five star’ by 45%.”
“The stockbroker services his clients in the same way that Bonnie and Clyde serviced banks. (Bill Bernstein)”
“The best way to avoid any conflict of interests is to work with an advisor on a fee-only basis.”
“Young investors should root for a bear market so that future returns will be higher.”
“Over the past 15-years the Mensa Investment Club underperformed the S&P 500 Index by almost 13% per annum.”
Take on the StreetAuthur Levitt
“Nothing astonished me more than witnessing the powerful special interest groups in full swing when they thought a proposed rule or piece of legislation might hurt them, giving neary a thought to how the proposal might help the investing public.”
“The vast and growing number of individual investors lacked focus, direction, or leadership to make much of an impression on Washington policy makers.”
“Brokers may seem like clever financial experts, but they are first and foremost sales-people.”
“The deadliest sin of all is the high cost of owning some mutual funds. What might seem to be low fees, expressed in tenths of 1%, can easily cost an investor tens of thousands of dollars over a lifetime.”
“The second deadliest sin is taxes. Judge funds (in taxable accounts) by their after-tax, rather than pre-tax, return.”
The Unbeatable MarketRon Ross
“The conclusion of countless studies is that beating the market is the result of luck, not skill.”
“Emotions–fear, impatience, panic, pride, overconfidence, overreaction, envy–are almost always detrimental to long-term investment success.”
“Giving up the futile pursuit of beating the market is the surest way to increase your investment efficiency and enhance your financial peace of mind.”
“Profitable trading strategies are self-limiting and self-destructive, eventually discovered and eliminated through overuse. (Rubenstein)”
“The current price of a stock is the best attaiable summary of all that’s now knowable.”
“Extensive studies by Davis, Brown & Groetzmann, Ibbotson and Groetzman, and Elton et al, all confirmed there is no significant persistance in mutual fund performance.”
“If you happen to detect a recurring pattern, it’s logical to assume that it’s already reflected in the price, unless you think you are the only one alert enought to see it.”
“If a market beater (newsletter) actually had something valuable to sell, he wouldn’t be selling it. He would exploit it himself.”
“If you had a system that did actually beat the market, it would always pay to leverage.”
“Their (Beardstown Ladies) story illustrates the lack of scrutiny or verification that is the rule in the investment world.”
“There have been thousands of individual stocks that have suffered permanent loss, but never in this country has the overall market experienced permanent decline.”
“At the very least, investors should not base their decisions on the assumption that the equity premium will always be as high as it has been in the past.”
To be continued . here.