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Archive: https://archive.today/5Lh01

From the post:

>If you’ve ever asked the internet how to invest for the long run, you’ve heard the same answer many times: “Just buy a well-diversified index fund and you’ll be fine.” It’s repeated so often it’s become gospel. And to be fair, it’s not bad advice — it’s certainly better than picking stocks on a hunch. But in my opinion this advice doesn’t give the investor the full picture and a realistic expectation of the journey. It only considers the compounding power, but doesn’t emphasize enough the emotional process. Would you be ok through a 55% drawdown? Are you ready to watch three and a half years go by before your portfolio goes back to where it started? The advice is usually given without enough numbers attached to it — which, for something as important as where you park your life savings, is surprising.

Archive: https://archive.today/5Lh01 From the post: >>If you’ve ever asked the internet how to invest for the long run, you’ve heard the same answer many times: “Just buy a well-diversified index fund and you’ll be fine.” It’s repeated so often it’s become gospel. And to be fair, it’s not bad advice — it’s certainly better than picking stocks on a hunch. But in my opinion this advice doesn’t give the investor the full picture and a realistic expectation of the journey. It only considers the compounding power, but doesn’t emphasize enough the emotional process. Would you be ok through a 55% drawdown? Are you ready to watch three and a half years go by before your portfolio goes back to where it started? The advice is usually given without enough numbers attached to it — which, for something as important as where you park your life savings, is surprising.
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What I don't like about them is that they buy high and sell low. It is investing in companies when they are already in the top 100, 500 or whatever, and when those companies drop in value and fall off of the index, that is when they are sold.