Conclusions (1.5)

If we trust the academics, seasoned veterans, and the recommendations of the Investment Titans, we should not trade at all.  We should invest.  If you cannot resist the prospect of playing a few hands in the greatest casino on Earth, do it with your mad money.  The majority of investors that want to pass the sleep test over a period of many years will want to invest in mutual funds as opposed to individual securities.

These days, any investment under the sun is sold as a basket that can easily be added to a portfolio for purposes of diversification.  When it comes to investing over the long haul, the principles of compounding dictate that every tiny bit of returns must be realized in the investor’s portfolio, not in the broker’s and advisor’s bottom line.  The best way to accomplish this is to invest in index funds with the lowest possible fees.

References and Further Reading

Boggle, J. Common Sense on Mutual Funds (10th Edition).

SEC. (2016).  Mutual Funds and ETFs.  A Guide for Investors.  U.S. Securities and Exchange Commission, Office of Investor Education and Advocacy.  Available:  https://www.sec.gov/investor/pubs/sec-guide-to-mutual-funds.pdf

EC.  (2007). Variable Annuities:  What You Should Know.  U.S. Securities and Exchange Commission, Office of Investor Education and Advocacy.  Available:  https://www.sec.gov/investor/pubs/sec-guide-to-variable-annuities.pdf

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