- Since 1973 the S&P 500® Index has posted considerable gains—over this period the index has averaged over 10% per year in gains after reinvesting dividends, before taxes and fees.
- However, investigating other 45-year periods (going as far back as 1871) leads to a more useful picture of the index’s performance across differing economic environments.
- According to history, it’s better to invest in the index over longer periods in order to increase the likelihood of providing favorable returns and decrease the likelihood of losing money.
Continue reading “Why Invest Forever? (Part 3)”
- 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.
Continue reading “Market Timing 101 (Part 1)”
- 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.
Continue reading “Passive is the New Aggressive (Part 6)”
- 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)”