Most of the risk to an investment portfolio comes from
The Investor
Human error, impatience and arrogance explain most of the gap between actual realized returns and that of a passive stock index. Active managers who try to predict future events are routinely wrong and those that are randomly right, can’t do it again. Any claims to the contrary should be considered marketing hype.
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Index Returns
Passive investing (Index Funds) not only beats active by a wide margin, it is generally more cost efficient as well..
The more decisions that a portfolio manager brings to the investment process, the greater is the risk of their making a mistake
Succesful investors acknowledge their limitations and once they’ve identified companies with good potential, will sit back and let the future evolve in the way that it will.
Simple and Efficient Portfolio Management.
If you can identify those companies that objectively have the best prospects for predictable long-term growth, you’re done. Buy them, hold them and let their management do their jobs .
