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The Only Proven Road
Taylor Larimore 02-27-2003, 8:26 PM | Post #80262 | 
Hi Diehards:
I have just completed a wonderful book by Chandan Sengupta titled, "The Only Proven Road to Investment Success." Mr. Chandan was a vice president at Chase Manhatten Bank and senior financial advisor for Mobil Corporation. Here are a some excerpts:

"The most unrealistic expectation people have about investing--especially investing in stocks--is that if they work hard and smart or can find the right advisor, they can improve their investment returns."

"Experts agree that having the right investment plan and doing your asset allocation right are crucial to your investment success."

"Use a low-cost, broad-based index fund to passively invest in a little bit of a large number of stocks."

"Any investment method that relies on predicting the future is doomed to fail."

"Your best bet is to keep investing regularly in a broadly-diversified index fund ignoring whether you or others think the market is too high or too low--."

"Unless you are very careful, over the years you may end up paying a lot of money in taxes, probably a lot more than you will in expenses."

"To succeed as an investor you have to first choose the right investment method and then follow it for decades with a true, unshakable conviction."

"You should switch all your investments in stocks to index funds as soon as possible, after giving proper consideration to any tax consequences."

"Do not even open a brokerage account unless you absolutely need it."

"There is overwhelming evidence that the simplest possible investment method works much better than all the other more complex ones."

"Simplifying things takes knowledge and work."

"Unexpected inflation is the real threat."

"If you are going to buy bonds, TIPS are your best choice."

"It (I-Bonds) is your best choice for any money you want to invest for the long term in a safe, inflation-protected investment in a taxable account."

"Growth and value investors hold their beliefs with almost religious fervor. Over time neither seems to do better than the other."

"The redemption fees, which only a few funds charge, are actually a good cost."

"You have to either decide to stay in (the stock market) or not get in at all. Anything else is a loser's game."

"Should you keep buying even if the market is going down? Absolutely. That is the best time to buy."

"The crucial thing to remember is that if you are buying the fund in a taxable account, you should plan to hold it not just for years, but decades. Otherwise you will lose a key tax advantage."

"Holding onto stocks gets very risky as you get closer to the time when you will need the money."

When is buying anything other than a low-cost fund justifiable? The correct answer is "Never".

"Depending on how far you are from retirement, the combination of saving regularly, reinvesting all your returns, and not paying taxes for a long time can help you build up savings of a size that may be truly beyond your wildest dreams."

"Avoid buying life insurance products (like whole life, universal life, and varible life) or deferred annuities to defer taxes."

"You should have no expectations about short-term and year-to-year returns on stocks."

"In investing we are our own worst enemies.--our emotions get in the way."

"If you are not going to stick to your chosen investment method through thick and thin, there is almost no chance of your succeeding as an investor."

"Try to ignore the news as much as you can.--Acting on any of that information will almost certainly do more harm than good."

"Stay away from the major full-service brokerage houses."

"Everyone in the investment management community is keen to offer you advice at as high a price as possible. You need to be on your guard all the time"

"I can recommend only one investment newsletter, the Hulbert Financial Digest -- and it is actually a newsletter that rates all major investment newsletters."

"Don't listen to the chant that this time it is different or this is a different era."

"Buying on margin is playing with fire."

"Remember that there are no sure ways to make a lot of money fast; but ways to lose a lot of money fast abound."

"Over the years the Vanguard Group has stood head and shoulders above other fund companies in giving the interest of the investors the highest priority."

"To succeed, you must follow your investment plan with discipline, year after year, decade after decade. The simpler your investment plan, the easier it will be to stay with it."

Best wishes.

Originally posted in thread: 26123
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