Fundamentals of passive investing; a tested growth strategy

Economics Nobel prize winner Paul Samuelson stated that investing should be like watching grass grow or paint dry. The Monday Morning Program recommends exactly that. This is passive investing. It consistently outperform’s active investing over the long run. Here it is in four simple steps.

  1. Starting early in life, save 10% of income.
  2. Dollar-cost average your savings by buying one of the few exchange-traded funds which mirror the S&P 500.
  3. Do so in tax-advantaged portfolios.
  4. In retirement, some 35 years into the future, withdraw 4% of portfolios to live on.

Only those who do not understand markets would argue these points.

The first of these points might well prove to be the most difficult for many investors.

However, starting early in life would be a good time to look into individual stock investing for those interested in that approach.

Early in life? Why?

Each stock transaction has a buy and a sell side to it. Only one of them is right. Investing in individual stocks (stock picking) is wrong half the time. Doing so early in life allows for recovery.


The Monday Morning Millionaire Program was designed to offer compressed investment convictions. Over the last two decades, the program has outperformed over 90% of portfolios, including professionally managed ones.

The program does not provide any investment advice or endorsements.

With fewer than 300 words, members can read this post in less than five minutes. Following and studying the links imbedded in these posts would take longer. How members manage a post depends on their level of interest and investing knowledge.

 

 

Dr. Milan Somborac

The Monday Morning Millionaire Program supports do-it-yourself (DIY) investors which I have been for over 50 years. About my team and me

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