Here's a recent Fortune article that has some good investment tips. The piece itself is about the two guys who manage the endowments at Harvard ($23 billion) and Yale ($15 billion), but what I found most enlightening was investment advice the Yale guy gives to small investors near the end of the piece:
Since you don't have the Yale name behind you and billions to invest, what's your best strategy? Here are his tips:
- Diversify -- Hold U.S. and foreign stocks, inflation-indexed and other government bonds, and real estate.
- Avoid actively managed mutual funds, most of which "put profits before fiduciary duty."
- Buy low-cost index funds and exchange-traded funds.
- Avoid hedge funds and corporate bonds.
- Rebalance your portfolio at least once per year.
- Don't try to time the market or chase performance.
I love this advice. It's simple and basic, yet very practical and effective. I've been investing according to these principles for years (who knew I was using the same method he recommends?) and have done very well.
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