“A blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.”
- Burton Malkiel, “A Random Walk Down Wall Street”
Many “experts” want to sell you a system, even if you don’t consider them to be a system. Mutual funds, ETFs, open- and closed-ended funds, target date ETFs, passive and actively managed ETFs, “How to Turn $100 into $1,000 in a Week” Facebook ads, etc. Everyone has a system. Yet, none of these salespeople are living happily in a mansion in Monaco – they’re working to sell you a system, and it’s not out of the kindness of their hearts.
Dismissing the sponsored Facebook ads, many experts suggest ETFs, mutual funds, etc. While these aren’t bad ideas, I would like to ask you – are they necessary for your? Do you want an actively-managed ETF? Well, just research the largest holdings in it, and buy those. No commission, and no annual management fees. These systems are simply a way of doing for you what you can do for yourself. And if that’s what you need, there’s nothing wrong with that. Not everyone loves to study the market and wants to spend their time researching stocks, and deciding buy/sell decisions.
However, you can build a portfolio yourself that can meet or beat mutual funds and ETFs. Also, you avoid their continual annual fees. My first stock purchase with a broker in 1985 was $30+, and now trades are commission-free with many online brokers. Many actively-managed ETFs have 50% of their investments in as few as 10 stocks. Why not just buy those 10 stocks, and routinely monitor what the ETF is invested in? You can always make changes along with way.
You can do it yourself. There’s no reason why you can’t.
DECADES to Wealth 