03-19-2004, 4:42 PM | Post #107666 |
View Complete Thread
"The Coffeehouse Investor--How to Build Wealth, Ignore Wall Street, and Get On With Your Life" by Bill Schultheis is the easiest to read and one of the best investment books I have read. Bill spent 13 years as a broker with Solomon Smith Barney. He is now a financial adviser, mountain climber and author living in Seattle, Washington. Here are excerpts:
"The first step in being a responsible investor is to calculate an approximate savings goal."
"The investor who starts saving and investing $300 monthly at 8% in a retirement account at age 25 instead of age 35--ends up with an additional $604,195 in her portfolio at age 65."
"When inaction finally turns to action we feel good about the action."
"If there is one place in your life where you don't want to make a mistake it is with your investment decisions."
"It's easy to get caught up in the empty words of Wall Street and do lots of wrong things."
"When fear and greed arn't controlled, buying and selling individual stocks can quickly become a miserable experience."
"We have the misconception that dealing with something so far away means sorting through thousands of mutual funds, hundreds of advisors and dozens of financial magazines."
"Focusing on what really counts and ignoring everything else is a major step in any successful journey."
"The three fundamental principles of investing: Asset allocation; approximating the stock market average; saving--and these three principles are in our control."
"42% of the millionaires of this country make less than one transaction per year in their investment portfolios."
"Wall Street types have a tendency to portray this world of investing as fun, exciting and full of busy portfolios."
"As long as Wall Street has a vested interest in lots of transactions and busy portfolios, investors will continue to latch on to the the hype and hysteria of Wall Street, perpetuating the misconception that by carefully reviewing market trends, diligently studying mutual fund tables, religiously researching global economies and closely watching interest rates, anyone and everyone can own a successful portfolio."
"Let go of the mistaken belief that the secret to a successful portfolio is to accurately forecast bull and bear markets."
"Let go of the mistaken belief that the secret to making money in the stock market is relying on stock market experts."
"The first step in discovering our true passions and talents is to isolate and eliminate clutter in our lives, including in our finances."
"When you take a risk in the stock market you better make sure it's a risk worth taking."
"One key to building a successful investment portfolio is to eliminate the risk you can control and reduce the risk you can't."
"The financial industry has a knack for making the subject of asset allocation sound very complicated, very technical, and very confusing -- in the midst of their appeal to our fear and greed."
"Investment risk is the risk that the money you re counting on to purchase something important or sustain your lifestyle at some point in the future won't be there when you need it."
"This is Wall Street's best-kept secret: Only 10% of all managed mutual funds beat the Wilshire 5000 Index in each of the last three-, five- and ten-year periods (3-31-99)."
"I know of no other industry in which so many self-porclaimed experts try so hard to convince us that they are wildly successful at that which they so miserably fail."
"Once you remove yourself from Wall Street's complete and total obsession with trying to beat the stock market average and accept the fact that approximating the stock market average is a rather sophisticated approach to the whole thing, building a successful common stock portfolio becomes an immensely gratifying experience."
"The simplest approach to diversifying your stock market investments is to invest in one index fund that represents the entire stock market."
"The concept of having a superior mutual fund by investing in a mutual fund that reflects the stock market average is a difficult concept to grasp."
"If you choose to add value and growth index funds to your portfolio, you are doing nothing more than fine-tuning an already good thing."
"Using past performance numbers as a method for choosing mutual funds is such a lousy idea that mutual fund companies are required by law to tell you it is a lousy idea."
"The top 35 mutual funds from 1978 to 1987 cumulatively under-performed the stock market average by 7% annually during the next ten years."
"The most important factor when diversifying is to adhere to your asset allocation strategy, because when you stick to your strategy and rebalance your asset at year-end, buy and sell decisions are no longer arbitrary."
"Instead of comparing your current funds to other, better-performing funds, you should compare your current funds to their apropriate stock market index."
"If you invest in more than two actively managed mutual funds in each of the three common stock groups you
Originally posted in thread: 33915