05-07-2004, 11:48 AM | Post #111897 |
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This book by Dr. Paul Farrell is a "gem." He is a distinguished investment columnist with CBS MarketWatch; former investment banker with Morgan Stanley; and former executive vice president of the Financial News Network. Here are excerpts:
"Investing really is very simple stuff. You can do it yourself."
"Lazy portfolios are keep-it-simple, no-hassel, low-stress, time-saving, low-maintenance portfolios--so you can get on with the business of everyday life."
"Vanguard funds are the big favorite among the lazy investors because of their low costs."
"Wall Street's $15-billion-a-year 'Hype Machine,' as Business Week calls it, is a relentless machine created to make you believe Wall Street has some kind of mystical pipeline to the Gods of Money."
"Believing that investing requires some kind of special or weird thinking that you don't have will blind you to your own natural instincts."
"We've got a market nobody understand, least of all Wall Street's so-called experts."
"The only solution is to be in the market all the time and stop jumping in and out."
"In a study of 66,400 Merrill Lynch investors, professors Odean and Barber discovered that buy and hold investors actually beat the more active investors by a fairly sizeable margin, 18.5% to ll.4% over a six-year period."
"The more I know, the more I know I just don't know, and neither does anyone else."
"You don't need to complicate your life--just stick to the basic Scott Burns Couch Potato Portfolio (50% S&P/50% Total Bond Market) with no stress, except your little ten-minute annual rebalancing efforts."
"The Coffeehouse Investor's Web site is loaded with information about Bill's simple philosophy of investing."
"Vanguard's 14 million shareholders own 70% of all index mutual funds."
"You never have to buy a load fund, never, never... never."
"Just three funds--four if you want a bond fund to smooth out the volatility are all you really need to include in a good long-term portfolio. (Kiplinger)"
"Taxes, Time, and Psychology favor the laziest portfolios."
"The market is totally random, irrational, and unpredictable. And it loves humbling the mighty. Try to beat it and you'll lose money."
"Independent research studies indicate that actively managed portfolios fail to outperform passive computerized index portfolios."
"Perhaps the single most important lesson you'll need on the road to becoming a millionaire is frugality."
"A penny saved is a dollar earned, thanks to compounding."
"The Financial Research Corporation tested: past performance, Morningstar ratings, expenses, turnover, manager tenure, net sales, asset size, alpha, beta, standard deviation, and the Sharpe Ratio. The FRC concluded that the expense ratio is the only really reliable one in predicting future performance."
"No wonder Wall Street and America's actively managed funds have hated having John Bogle around for the past several decades--he's exposing their costly game."
"If you set aside $5,000 for a newborn for 65 years at 10%--you'd have more than $2.4 million."
"Charles Schwab says that for every five years you wait to start saving for retirement, you'll have to double your annual savings."
"Buy the whole market with index funds, and never sell."
"Kahneman was asked by a CNBC anchorman the day afer his Nobel was announced what investment tips he had for viewers. He responded, 'Buy and hold.'"
"Charles Carlson says in Eight $teps to $even Figures: 'Reacting to news on CNBC or any other financial media outlet is a loser's game.'"
"Experience has taught me that the relentless noise from breaking news sources, like CNN and CNBC, easily distracts most investors from what really works in the long run."
"Vanguard just emerged as some kind of secret weapon quietly used by savvy investors."
"If you gave Bogle $10,000 in 1976 (in the S&P 500 Index Fund), your investment would now be worth $200,000--20 times as much as you put in."
"'I wish that more fund companies put the interest of their shareholders first, but the fact is, Vanguard is the best in this dimension' (Eric Tyson, author of eight 'Dummies' books)"
"Eric's Keep-It-Simple Portfolio: Vanguard Total Stock Market; Total International; Intermediate-Term Tax-Exempt Fund."
"Where does Fama invest his retirement money? In index funds. Mostly the Wilshire 5000--."
"Dilbert's Anti-Weasel Defense Portfolio: 70% Vanguard Total Stock Market; 30% Total Bond Market."
"Never try to time the market; it's too much of a gamble."
"Perhaps the most amazing insight I got out of this review of the investment habits of Nobel laureates is the simplicity of their investing strategies."
"The ideal hybrid fund acts like a whole portfolio, diversifying between stocks and bonds for you."
"'Far more money has been lost by investors trying to protect themselves from market downturns than has been lost in the downturns themselves.' (Peter Lynch)"
"Greed triggers a buying frenzy at the top of a cycle. Fear creates a selling panic at the bottom. Investors l
Originally posted in thread: 34719