Saturday, December 16, 2006

advice i'd pass along to my daughter

This week The Wall Street Journal had an interesting column with the title of this post. You can read it in its entirety here.

Below is point eight of nine points:

"We all tend to think we're better-than-average drivers, pretty good looking and smarter than most. This overconfidence spills over into our investing and fuels our headstrong pursuit of market-beating returns.

"Yet this is almost always self-defeating. Trying to beat the market typically involves a heap of investment costs, and those costs mean our efforts to beat the market usually fail miserably. Indeed, you will probably fare far better by sitting quietly with a handful of low-cost mutual funds, preferably market-tracking index funds.

"But it isn't just that efforts to beat the market are usually self-defeating. They are also unnecessary. Want to retire rich? All it takes is time and regular savings."

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