Investment Help

If you are seeking investment help, look at the video here on my services. If you are seeking a different approach to managing your assets, you have landed at the right spot. I am a fee-only advisor registered in the State of Maryland, charge less than half the going rate for investment management, and seek to teach individuals how to manage their own assets using low-cost indexed exchange traded funds. Please call or email me if interested in further details. My website is at If you are new to investing, take a look at the "DIY Investor Newbie" posts here by typing "newbie" in the search box above to the left. These take you through the basics of what you need to know in getting started on doing your own investing.

Saturday, March 24, 2012



Steve Jobs:  “That’s been one of my mantras — focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.” [BusinessWeek, May 25, 1998]
I recently sent in my iPod to Apple because they notified me the model I had might have battery problems.  This iPod was the size of a playing card, had to be strapped into this holder that went around my bicep so that I could listen to music when I ran. There were days I spent more time trying to strap it on than I did running.  Apple returned an iPod the size of a postage stamp. It clicks on my t-shirt, has photos, and all kinds of neat fitness-related stuff built in--the end result of hard thinking by passionate people.

Jobs' observation is just as true in the investment world as it is in technology and other parts of life. Thinking hard about the investment process, studying the data, and clearly setting out the objectives will get you to the point where you realize the optimal approach is simple and elegant.

Fortunately, many hard thinkers have done the required thinking to understand why investors--both individuals and professionals--underperform so badly over long periods and how to construct portfolios. Below is a short post detailing the performance of a 3-fund portfolio  (as basic as you could possibly get, short of the more expensive life cycle funds) that has had performance over the last 5.5 years that has outperformed, I would guess, at least 75% of both professional and individual investors.  Note that this period spans the sharp downturn in 2008/early 2009 as well as the European problems of the last couple of years.

Setting up the portfolio would take about the same amount of time it takes to read the article - approximately 5 minutes.  Rebalancing the portfolio to reset the risk level also takes about 5 minutes. This is the end result of hard thinking.

Line up all the investors over the past 5.5 years who have spent chunks of their lives listening to CNBC, Jim Cramer, et al., and tried to time the market and pick stocks.  There will be some who beat the portfolio shown here, but there will be many many more who didn't.

My suggestion:  the next time a friend or co-worker or anyone, for that matter, starts whining about their investment performance, whip out a copy of Andrew Hallam's post, Don't Forget That You're Getting Older, and recommend to them that they read it.  Better yet--suggest they think hard about what it says. You could be a retirement saver!


  1. I finally got to reading Andrew Hallam's book! The message is very powerful: Ordinary individuals can get extraordinary results with indexing.

  2. How an individual investor could mimic the trades that Jim Cramer recommends on the air is beyond me. I feel like I'm getting whipsawed just listening to him so most days I turn the TV off when he comes on the air.