UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: TMFMurph Big gold star, 5000 posts Old School Fool Home Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75383  
Subject: Big Frog "gets it"... Date: 7/2/2012 9:18 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 6
....and is dead on target, at least for this investor:

( printed in entirety for non-IV subscribers )

As an individual investor, your best shot at an edge over the market is driven by your patience. You don't need to be a 'smarter' or 'faster' analyst or have better access to information. Unless you've got the billions the big trading firms do, any edge you have, other than patience, is going to be minor and short-lived, anyway.

That said, the longer I invest, the less I care about relative returns.

For one thing, my primary strategy is based on trying to grow our dividend income. What I've found is that the strategy works well in boom times when companies naturally raise their payments, but that it also holds up well in not so boom times, when each new purchase or reinvested dividend buys all that much more stock... A lousy year on the net worth front that STILL brings with it a double digit increase in passive income isn't all that bad in my book.

For another thing, what I've found is that our general pattern from a performance perspective is that we're getting decent overall returns, often beating the market when it tanks and often losing a bit of ground when the market booms. There's a very real risk that if I go chasing faster returns by looking to 'beat those booms' that I'll wind up chasing things right off a cliff.

And finally, as I talk to friends and family in this economy, the more I realize that the most important split isn't who's beating the market and who's not, but who is capable of managing their money and who isn't. I know far too many people who make more than I do who are struggling way more than we are. The acts of budgeting, saving, and investing matter a ton more than the returns on any investment, when it comes to personal money management. I'd rather have cash invested earning a market-trailing rate of return than have no cash available to invest in a market-trouncing system...

-Chuck
Inside Value Home Fool


Cheers!
Murph
Home Fool
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement