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"The Teenage Investor" -- An investment "gem"
Taylor Larimore 08-12-2003, 10:25 PM | Post #90384 | 
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Hi Diehards:
Diehard, Timothy Olson (username: paclanin), has made over 1,000 posts on the Morningstar forums. Using the knowledge obtained here and elsewhere, he has written a fine book on investing at the age of 14. Here are excerpts:

"To my Grandmother who got me started in investing."

"I'm dedicated to helping novices, especially kids, learn about the subject I love most--investing."

"I would like to thank (Diehard) Michal Leboeuf, Ph.D. Without his mentorship, guidance, and friendship, the book would not have been published."

"(Also) Richard Ferri, CFA, for looking over and adding his insight--and Larry Swedroe for providing ideas and thoughts on Wall Street."

"It isn't money that drives me--it's the research--it's my passion."

"Don't put off till tomorrow what you can do today--especially with regard to investing."

"Capitalize on the world's most precious commodity--time."

"An excess amount of greed can be hazardous to your wealth."

"I began to follow many of the principles and ideas of John Bogle, the legendary founder of the Vanguard Group."

"Index investing is an efficient and somewhat carefree way to build wealth over time."

"Diversification is very important, particularly when markets are not doing well."

"It's worth noting that you can't avoid all risk."

"Bonds should be an important part of almost everybody's asset allocation."

"Should REITs be a regular part of my asset allocation? My answer is 'yes'."

"Should precious metals be a part of yoru asset allocation? My answer is 'no'."

"Those looking for a bond index fund should look no further than the Vanguard Total Bond Market Index."

"The lower the risk, the lower the return."

"Focus, Focus, Focus! It's easy to get caught up in all the investment possibilities and lost in the figures."

"The Rule of 72. This is the simple way to figure out how long it will take your money to double. Just divide 72 by the interst rate."

"Compound interest is, as multimillionaire John D Rockefeller put it, 'the eighth wonder of the world.'"

"Contrary to popular belief, many rich people don't get rich by speculating in complex financial instruments."

"A good plan can help us get things done and working without a plan can be hazardous to our wealth."

"You need a plan based on your specific goals, your time horizons, and your risk tolerance."

"There needs to be a balance in saving, spending, giving away, and enjoying what you've worked so hard to earn."

"If you like exotic countries, visit them--don't invest in them."

"Nobel Laurete, Wm. Sharpe, suggested that a basic, diversified portfolio should have about 60% stocks and 40% bonds, adjusted in either direction according to your risk tolerance."

"The Efficient Market Hypothesis (EMH) simply means that everything anyone knows about a stock has already affected the price."

"Don't own any investment that keeps you awake at night."

"Modern Portfolio Theory shows that a portfolio invested 100% in bonds is actually riskier than a portfolio that's 74% in bonds and 26% stocks--and the mixed portfolio provides higher returns."

"Before choosing your investments, you've got to have a strong sense of your risk tolerance."

Dollar cost averaging (DCA) is very simple--and very smart."

"It's very hard, if not impossible, to beat the market on a regular basis."

"Traditionally, fewer than 20% of active managers have beaten the performance of the S&P 500."

"Because brokers tend to make more money on load funds, they often fail to recommend index funds to their clients."

"Check the distribution date and then wait until the dividends have been paid before you buy."

"I have only three words of advice on day trading: don't do it."

"Sector funds tend to do very well or very poorly, depending on the conditions of the sector."

"REIT funds are often a good way to add more diversification to your portfolio."

"A 12b-1 fee is perhaps the most pointless fee that a mutual fund charges."

"If you choose a diversified basket of low-cost index funds, you'll ultimately prevail over your investing lifetime."

"Bogle is a great role model for me and many other people: not only does he care about the individual investor, he goes out of the way to work for us."

"The lower the fees, the better your chance for investment success."

"Simplicity is the master key to financial success. (John Bogle)"

"Buying the market is a lot easier and a lot better for your portfolio than buying individual securities."

"If you want more risk and you want the thrill of a manger trying to beat the market, actively managed funds may appeal to you."

"Overlapping is one of the many mechanisms that are hazardous to your wealth."

"Can you beat the market? My advice is not to bet on it."

"If you do try to beat the market, only use a small percentage of your overall invement dollars."

"Always avoid jumping in and out of investments. That's a losers game."

"What's important is not 'timing' themarketbut 'time' in the market."

Remember to ta

Originally posted in thread: 29148
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