INVESTING
WISDOM AND REASONING



Although I've tried to limit myself to other life enhancing areas, I choose here to try to correct an area where people live in fantasyland and to have people invest their time where it has a higher personal payoff.

As a financial advisor, I reviewed some deep investment studies in the process of becoming a Certified Investment Management Consultant.  The studies, along with the reasoning, showed there was, even with the experts, no truly superior performances in terms of skill (versus luck), at least not any provable before 15 years.  Even Peter Lynch's record at Magellan Fund had a huge amount of luck. 

Unless you have millions and millions to invest, your cost of investment management fees cannot be justified.

You should follow the advice of Daniel R. Solin in The Smartest Investment Book You'll Ever Read - the Simple, Stress-Free Way To Reach Your Investment Goals.   Don't get sucked into foolish fantasy and wasted efforts and/or money!!!! Invest your time into higher payoff areas of your life!(If you're not convinced then read Zweig, Your Money and Your Brain: How The New Science Of Neuroeconomics Can Help Make You Rich.  (The bottomline: Buy low cost funds and fully diversify across the asset classes.  Don't buy managed funds with higher fees - they don't win on the average!  See The The Irrational Investor but read the book for sure.  It is a vital decision!)

Consider these videos:  Daniel Solin at Google (1:03:27, the key point is made in the first 10 minutes!), or Daniel Solin Interview (9:07).  

Take the test: Investor Questionnaire, to determine your asset allocation, then follow the advice in the Daniel Solin Interview.

Spend your time in the efficiency and effectiveness areas listed in the rest of the Material And Financial Matters Section. 

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Books

    Several books are recommended. See Recommended Books and Tapes and order via the link
       to Amazon.com.  If you'll read one book, it might be

           The Smartest Investment Book You'll Ever Read - The Simple Stress Free Way To Reach
               Your Investment Goals, Daniel R. Solin - Do this and you'll do what works and what also
               saves an enormous amount of time and cut any concern dramatically.

Summaries

                Should I Buy Real Estate Properties Myself?  
                The Time Value Of Money, Compounding - Understand this, as Einstein calls it the
                   "eight wonder of the world."

                Section:  Is my manager performing?
                     Which Approach Works And When - Consider using these yardsticks and this
                         perspective to better do a reasoned evaluation.
                     Should I even have an investment advisor? - The tradeoffs are great.  Be sure to
                         read this. 

Get Rich Quick...

   The Attraction: A Quicker/Better/Easier Way To Riches Vs. Reality - You can't deny economics
       and the 10 realities that apply here!!!!
   The Trading Wisdom Of A Seasoned Professional, For The Unseasoned - Follow this and you'll
         save lots of headaches...


Other Resources

    Several good comments and effective implementation have been made from the training in
        Millionaire Mind (Be sure to get a scholarship to the initial one.  The seminar comes highly   
        recommended by those who have attended it, without exception.  However, beware that most
        attendees to the free three day initial seminar spend alot on follow up workshops. )

     Websites:  See recommended websites. 
                      www.bankrate.com for interest rates on anything (CD's, mortgages, etc.)




The Psychology of Managing Your Financial Matters

Investment Advice For A Friend - No loads, period, using this strategy.  Simple and will save lots of mistakes and money and produce higher returns with less risk!

The Irrational Investor - Is There A Prudent Investor? - If we only engaged our rational thinking and verified a few basics...we would not underperform so much!

Should I Even Have A Personal Investment Advisor? 

About Money In Our Minds - A Realistic View. - Beliefs, correct ones and unrealistic ones.  The tragedy is that we need not worry so much!

Warren Buffett - A Man Of Great Wisdom, Not Just A Super Investor 

Outside articles:

Psychology Of Investing - A brief visit to "behavioral finance".

But the above leaves out the statistics, which prove that, except for luck, you or a manager will not have superior performance.  Most of what investors do is a matter of "much ado about nothing" - they do not produce better results, while they spend vast amounts of wasted time!


Really deep stuff, for those who want to go deeper:

Psychology & Behavioral Finance