Comments on: The Four Pillars of Investing: Lessons for Building a Winning Portfolio http://www.theoldarmy.com/2010/02/the-four-pillars-of-investing-lessons-for-building-a-winning-portfolio/ Finance For Best Future Fri, 20 Jan 2012 21:06:17 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: Individual Investor http://www.theoldarmy.com/2010/02/the-four-pillars-of-investing-lessons-for-building-a-winning-portfolio/comment-page-1/#comment-384 Individual Investor Mon, 22 Feb 2010 06:59:20 +0000 http://theoldarmy.com/2010/02/the-four-pillars-of-investing-lessons-for-building-a-winning-portfolio/#comment-384 I smell a straw-man. The author is trying to sell you a book. Obviously none of us will replicate the index exactly because we don't live for 300 years and, if my heirs blow my fortune, that's no skin off my nose anyway. <br /> <br />The long term market chart outlines a possibility, an investing goal if you like, the market potential. Our average net personal achievement will be lowered by the various frictions that eat away at the results: taxes, inflation, commissions, mistakes and so on. But it is important to realize that the average is made up of under-performers and over-performers. That being the case, why is it impossible, as Bernstein implies, to beat the averages? Some people, by mathematical necessity, must have beaten the market as otherwise the market would be lower to the point that it averages out all the investors. <br /> <br />By stating that the average investor cannot beat the market and must be content to achieve the average through index funds, Bernstein automatically condemns his readers to mediocrity but does not save them from under-performance. Anyone who gets in and out of index funds at the wrong time will under-perform. <br /> <br /> Rating: 2 / 5 I smell a straw-man. The author is trying to sell you a book. Obviously none of us will replicate the index exactly because we don’t live for 300 years and, if my heirs blow my fortune, that’s no skin off my nose anyway.

The long term market chart outlines a possibility, an investing goal if you like, the market potential. Our average net personal achievement will be lowered by the various frictions that eat away at the results: taxes, inflation, commissions, mistakes and so on. But it is important to realize that the average is made up of under-performers and over-performers. That being the case, why is it impossible, as Bernstein implies, to beat the averages? Some people, by mathematical necessity, must have beaten the market as otherwise the market would be lower to the point that it averages out all the investors.

By stating that the average investor cannot beat the market and must be content to achieve the average through index funds, Bernstein automatically condemns his readers to mediocrity but does not save them from under-performance. Anyone who gets in and out of index funds at the wrong time will under-perform.

Rating: 2 / 5

]]> By: Richard N. Frank http://www.theoldarmy.com/2010/02/the-four-pillars-of-investing-lessons-for-building-a-winning-portfolio/comment-page-1/#comment-383 Richard N. Frank Mon, 22 Feb 2010 05:28:17 +0000 http://theoldarmy.com/2010/02/the-four-pillars-of-investing-lessons-for-building-a-winning-portfolio/#comment-383 The best single critique of the efficient market theory was done by Warren Buffet in "The Superinvestors of Graham-and-Doddsville." Bernstein never troubled to address it. Rating: 1 / 5 The best single critique of the efficient market theory was done by Warren Buffet in “The Superinvestors of Graham-and-Doddsville.” Bernstein never troubled to address it.
Rating: 1 / 5

]]> By: W. Grant http://www.theoldarmy.com/2010/02/the-four-pillars-of-investing-lessons-for-building-a-winning-portfolio/comment-page-1/#comment-382 W. Grant Mon, 22 Feb 2010 03:47:25 +0000 http://theoldarmy.com/2010/02/the-four-pillars-of-investing-lessons-for-building-a-winning-portfolio/#comment-382 There are a few tidbits here which would be very useful to the novice investor but it is based on classical financial theory, much of which has been debunked by modern portfolio theory. I expected some real substance but it's really just a bunch of drivel. <br />He is very big into index funds which for many is fine, but I wonder, if indexing is really the best way to invest then why do most of the very wealthy tend to avoid them. Universities hire money managers to actively manage their endowments and most of the affluent do the same. Just ask guys like Dennis Tito and Warren Buffet. Rating: 1 / 5 There are a few tidbits here which would be very useful to the novice investor but it is based on classical financial theory, much of which has been debunked by modern portfolio theory. I expected some real substance but it’s really just a bunch of drivel.

He is very big into index funds which for many is fine, but I wonder, if indexing is really the best way to invest then why do most of the very wealthy tend to avoid them. Universities hire money managers to actively manage their endowments and most of the affluent do the same. Just ask guys like Dennis Tito and Warren Buffet.
Rating: 1 / 5

]]> By: Richard N. Frank http://www.theoldarmy.com/2010/02/the-four-pillars-of-investing-lessons-for-building-a-winning-portfolio/comment-page-1/#comment-381 Richard N. Frank Mon, 22 Feb 2010 02:44:24 +0000 http://theoldarmy.com/2010/02/the-four-pillars-of-investing-lessons-for-building-a-winning-portfolio/#comment-381 The best single critique of the efficient market theory was done by Warren Buffet in "The Superinvestors of Graham-and-Doddsville." Bernstein never troubled to address it. Rating: 1 / 5 The best single critique of the efficient market theory was done by Warren Buffet in “The Superinvestors of Graham-and-Doddsville.” Bernstein never troubled to address it.
Rating: 1 / 5

]]> By: NewYorker http://www.theoldarmy.com/2010/02/the-four-pillars-of-investing-lessons-for-building-a-winning-portfolio/comment-page-1/#comment-380 NewYorker Mon, 22 Feb 2010 02:02:49 +0000 http://theoldarmy.com/2010/02/the-four-pillars-of-investing-lessons-for-building-a-winning-portfolio/#comment-380 When investing short term one needs to realize that the stock market can present us with a lot of hot stocks every day. <br /> <br />Most of them may seem promising, but the truth is that a good number of these trading & investing opportunities might not be as profitable as one might think. That's why it's very important to know how to choose them especially if you plan to take advantage of them on a daily or weekly basis. <br /> <br />One site that I recommend is MomentumStockPick com. They have a pretty clear way for trading hot stocks with momentum using easy to understand strategies. This is also a place where you can learn why knowing how to manage the stock rally is critical to your success. <br /> Rating: 4 / 5 When investing short term one needs to realize that the stock market can present us with a lot of hot stocks every day.

Most of them may seem promising, but the truth is that a good number of these trading & investing opportunities might not be as profitable as one might think. That’s why it’s very important to know how to choose them especially if you plan to take advantage of them on a daily or weekly basis.

One site that I recommend is MomentumStockPick com. They have a pretty clear way for trading hot stocks with momentum using easy to understand strategies. This is also a place where you can learn why knowing how to manage the stock rally is critical to your success.

Rating: 4 / 5

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