There’s a secret to investing that cuts a path directly to the profits that you’re looking for. The secret is simplicity. The more elementary your investment style, the more confident you can be of getting past bad markets and making money in the long run.
This insight isn’t easy for investors to accept. Wall Street resembles nothing so much as a storybook Oriental souk, whose subtle vendors bow and beckon, urging this purchase and that. The goods are colorful and varied. The more intricate the investment package, the stronger the spell it casts. But it’s stuffed with risks (and costs!) you couldn’t even begin to imagine. This glittering merchandise almost always profits the vendors more than you.
And you don’t need it! You can rack up a superb lifetime investment record with just a handful of simple, low-cost stock-owning mutual funds and a couple of bond funds. You can protect your retirement merely by owning the right percentage of bonds for your age. That’s all you really need to know. Investing is easy if you buy the simple things and buy them well.