Thursday, September 13, 2012

Are You Ready for a Stock Oriented Buy-and-Hold Passive DIY Approach to Investing?

3 questions to consider for a passive portfolio are questions worth reflecting upon and then answering for yourself.

Then if you answer yes to all 3, you may wish to take the time to read the survey results referred to hereinbelow. It would be time well spent:

"Building an effective passive investment portfolio is more of a mind game than you may imagine. Consider the following three simple questions. Do you believe that:
  • Over time, stocks will outperform bonds?
  • Long-term investing is better than short-term?
  • As time passes, the impact from market headlines will diminish?
If you agree with these ideas, you're ahead of the game when it comes to building an effective passive investment portfolio. Your thoughts are already in line with most professional money managers, according to a survey conducted by Pensions & Investments and Oxford University."

Summing Up

For those interested in learning more about how easy and rewarding long term investing can be, the three questions above are all answered YES.

And that's what the empirical evidence says as well, as the above referenced survey makes clear.

Unlike bonds, stocks are highly likely to protect our real inflation adjusted purchasing power over time.

In a period of increasing interest rates, bonds are not the things to own. The next several years are likely to see interest rates rise from today's historically low levels.

In the short run, volatile stock prices will rise and fall, but over a longer period of time there's a much greater likelihood that they will rise.

And believing that the price of stocks will increase over time is only common sense thinking in a market based economy like ours.

Stated another way, why would any of us ever take the risk of ownership if there would be no expected reward for doing so?

Thanks. Bob.

No comments:

Post a Comment