Tucking It Away

... for a rainy day. Or retirement. Because you don't want to end your days as a Walmart greeter eating Alpo for your evening meal.

I once thought that having a clever investment advisor was the key to riches. But I found out that clver investment advisors mainly make themselves rich, and you get the table scraps and cold leftovers.

My guy charged me 2% off the top, and in my infant-like naivete, I thought this was a bargain. But actually no. Because 2% per year over 25 years ends up being half the take.

You can keep most of the victuals for yourself if you invest in low-cost index funds that cost a fraction of percent instead of the idiotic two of my foolish youth. And if you keep with it, and don't freak out when the markets go south (as markets inevitably do). So how to be a smart investor?

Avoid the stupid crap:

Twenty Ways To Tell If You're A Lousy Investor



You look at your portfolio more often than you wash your car.

 You talk about investing like it's something exciting; using smart sounding words that you probably can't define.

 You're a reactive, not pro-active investor - changing your portfolio allocation in response to the latest headlines.

 You spend more time focusing on what you can’t control instead of what you can control.

 You own individual stocks.

 You think that variable annuities are investments, not insurance products.

 You consider market volatility to be abnormal and believe that volatility and risk are synonymous.

 You let your political beliefs determine your portfolio allocation.

 You think that the financial media provides actionable information; not relatively useless entertainment.

 You cannot explain your portfolio's composition in 60 seconds or less.

 You are attracted to investments that promise returns that are too good to be true.

 You don’t understand that investment success is more about not making errors than hitting home runs.

 You think that complexity is the secret to successful investing when it's simplicity that you need.

 You are focused on the short-term even though successful investing can only be measured over the long-term.

 You are more interested in tactics than in long-term planning.

 You can't sit on your hands and do nothing during times of market volatility.



You are overconfident. This comes from having an opinion about everything and confusing your opinions with insight.

 You 're optimistic at the wrong time. Optimism isn't tested during boom or normal times. The real optimist is someone who can stay positive during the bad times.

 You're constantly looking for shortcuts, seeking the non-existent Holy Grail of investing – an investment that yields stock market returns without stock market volatility.

 You chase past performance and own a portfolio that worked well last year but is unlikely to do so next year.

It's incredibly easy to be dumb about investing. You just have to get roped into a financial advisor who moves your money around in complicated transactions while taking 2% off the top. Simplicity and low cost are way kinder to your pocket book.