July 20, 2009

Approach to Investing

Your approach is everything. Bottom line is that while the bulk of investors are awaiting a pull back from the March 2009 lows, I am pretty confident that any pullback will be mild.

Your approach to investing has to change if you think you can time the market. I just read an article at yahoo finance which backs up what I've known for years, that timing the market is virtually impossible.

1983-2003 period for S&P 500

Buy and Hold ~ 10%
Minus 30 worst days ~ 19%
Minus 20 best days ~ 5%

Moral of the story is that if you are willing to risk missing the best days trying to miss the worst days, go ahead but you will have probably wasted a lot of your time, and money and got nowhere. You need to change your approach to investing.

I have said it before and will say it again, buy a no-load mutual fund or ETF that tracks the S&P 500 and you are doing really all you can do.

July 14, 2009

Warren Buffett

I blog, write and speak about investing all the time. One common theme is that very few can beat the S&P 500 with any consistency so why try. Buy the S&P via an ETF or no load mutual fund and forget it, you will end up beating 91% of investors and save a fortune on fees.

Unless you've been living under a rock, you know the name Warren Buffett who is one of the rare individuals / institutions that have beaten the S&P 500 with some consistency. If you like him, and its hard not too, you are in luck, you can invest side by side with Warren Buffett by owning his companies shares (Bershire Hathaway) which is listed at the NYSE as brk-a and brk-b.

Let Warren Buffett do the heavy lifting for you.

BTW, WB obviously has a vested interest in his companies shares but it is interesting to note that he buys US treasuries for his personal account.