August 19, 2011
Whitepapers and Publications
Investing for the Rest of Us
Article Preview
The consensus advice to investors for whom investing is not a full-time profession is this: buy a diversified portfolio of risky assets and hold for the long-term, while setting aside enough – parked safely in low-risk assets – to be able to weather the periodic market downturns. Explicit in this counsel is the view that the non-professional investor should not expect to beat the market, either by picking individual investments that will outperform or even by identifying investment managers who can pick such investments and generate market-beating returns. In addition to accepting that we cannot beat the market, this passive approach to investing also requires us to believe that the expected returns offered by the various assets are fair compensation for the risk we bear in holding them.
Previous