Do You Know What Really Works in Investing?
A number of things you may have learned over time as best practice, are simply not true. In fact, some of these “common sense” advice are downright dangerous to your portfolio
I literally wrote a book on this.
It bugs me when you are told that you need to diversify, but you are not told what good diversification looks like. Diversification helps by cancelling out some risk. Too much of it though, and your returns take a hit too with no further benefits in risk reduction.
An index fund is too much diversification.
Or you may be told that an asset class is dangerous. In reality, this asset class has delivered the best risk-adjusted returns over the last 100 years or so.
Not just best return, but best risk-adjusted return. This means that while you may be taking some extra risk, the returns more than pay for it.
While we are on this topic, what is risk anyway? The Wall Street and your financial adviser seem to think that risk is pretty much the volatility of a stock. Which is true for them. A volatile portfolio causes their clients to leave. But do you think a stock with minimum volatility that steadily declines is a better investment compared to, say, a stock that fluctuates a lot in the short run, but appreciates steadily over time?
There is more, and all of these conspire to keep your portfolio performing to the average. In investments, average is truly mediocre, but don’t they tell us that we should buy index funds and guarantee ourselves a return just below average?
Let me ask you this. Would you settle for average or below average in any other part of your life?
Why do you accept it then when it comes to your investments? Aren’t your investments important?
Much of the common-sense investing advice you get is myth. Designed to keep financial advisers and media in the business of peddling advice to you.
There is no such thing as safety in numbers
In investing, when there exists any such thing that everyone knows to be true, such a thing is not profitable.
Ever heard of the Billionaire who got rich by buying diversified index funds?
In this ebook I explode the 5 key myths that are keeping your portfolio mired in quicksand, unable to rise above the level of mediocrity. Understand these myths and you will have a powerful lever to get you out of the quicksand that is pulling you down, and start building a highly profitable investment portfolio and process that will benefit your family and grandfamily in the decades to come.