Market Timing 101 (Part 1)

Key Points

  • The opportunity cost associated with the poor timing of initial investment allocations can be significant.
  • After missing out on a period of good performance some investors may be further compelled to employ additional timing measures that can further exacerbate underperformance.
  • Market timing, the tactical timing of when to be invested and when not to, although sensible at a high level, is far easier said than done.

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Passive is the New Aggressive (Part 7)

Key Points

  • Research suggests that less than one percent of professional active manages are “skilled” at what they do.
  • Given this, the odds of picking a solid active manager is not just slightly worse than a coin toss; in fact, the chances are closer to slim to none.
  • Therefore, a passive investing strategy may be more sensible over the long run for most investors.

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Passive is the New Aggressive (Part 6)

Key Points

  • Over long periods, a passive investing approach in index funds is more likely to lead to an outcome that falls in line with a given benchmark.
  • With an active investing approach, where mutual fund fees are higher, outcomes are far less certain.
  • As such, the long-term opportunity cost of an active approach can be significant, and perhaps even disastrous.

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The World’s Most Expensive Hobby (Part 1)

Key Points

  • Hobbies can provide lasting benefit by allowing individuals to refocus their efforts away from their careers towards alternative forms of enjoyment.
  • Nevertheless, active investing as a hobby might not be the best use of one’s free time.
  • Not only are the chances of adding value from this endeavour very slim, but also, the costs associated with investing unwisely can profoundly impact one’s long-term goals and aspirations.
  • As an example, most investors often overlook opportunity cost when making investment decisions even though this particular expense can be significant.

Continue reading “The World’s Most Expensive Hobby (Part 1)”