Here's part 7 of the series from top personal finance bloggers offering their single-best piece of advice. Today, we'll hear from Ramit Sethi, entrepreneur and author of IWillTeachYouToBeRich.com:
"When you invest, there's a difference between being sexy and being rich. When I hear people talking about the stocks they bought/sold/shorted last week, I realize that my investment style sounds pretty boring: 'Well, I bought a few good stocks 5 years ago and I haven't done anything. All I did was buy more when the price went down.' But investment isn't about being sexy--it's about making money, and when you look at the investment literature, buy-and-hold investing wins over the long term, every time. Forget what CNBC or the magazines say about the stock-of-the-month. Do a rigorous analysis, make the right decisions up front, and then re-evaluate your investment every 6 months or so. It's not as cool as those guys in red coats shouting and waving their hands on CNBC, but as an individual investor, you'll get far greater returns."
Solid advice all the way around. The only thing I'd add to this (to make it even more "boring" but likely more effective) is to consider not purchasing individual stocks, but instead investing in index funds. I detailed this strategy in my post on investing basics.
Click here to read part 8.
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