Coffee Talk: Simplicity Wins

“Life is not complex. We are complex.
Life is simple, and the simple thing is the right thing.”
– Oscar Wilde

It’s hard to read the news each day without seeing another story about the riches that traders are reaping by investing in cryptocurrencies, tech stocks, or using Reddit message boards. In many ways, it just seems easy for anyone to make money in today’s market.

But the reality is much different. For the decade from 2009-2019, 89% of large-cap fund managers underperformed the S&P500.     89%!!

These are people who get paid lots of money to invest, and who watch the market all day, every day. They ostensibly know what they are doing.

In this latest Coffee Talk, Brian and Kurt discuss the danger of thinking that investing is easy…how much of your life you get back when you stop trying to be “smart” by timing the market…and the fact that, when it comes to investing over the long-term, “simplicity wins”.

References:

• “Passive Management Marks Decade of Beating Active US Stock Funds” – Forbes, Apr 20, 2020 https://www.forbes.com/sites/lcarrel/2020/04/20/passive-beats-active-large-cap-funds-10-years-in-a-row/?sh=203dfc5547b0
• “Budgeting Equals Awareness” – Carl Richards https://behaviorgap.com/category/money/
• “Study Shows ‘Behavior Gap’ Continues to Destroy Investor Returns” – Mickey Kim, Aug 2019 http://www.kirrmar.com/wp-content/uploads/ibj_august_16_2019.pdf