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December 10, 2009


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#3 scares me, because I'm sure in 30 years when many of these people are retiring, our country (currently on the path to socialism) will penalize us (that plan for our future) to pay their retirement.....

Very true.
Most of the activities you mentioned are emotion driven. One should first put together an investment( asset allocation in broad sense)plan and stick to that discipline.

Biggest strength of an investor( not a trader!) is discipline. That is the key to success.


Time may be the single most important. I'd wager that regular readers of this post have all read the old story of two people who invest: "A" starts at 21. Invest X for 5 years and never another dime. "B" starts at 30 and keeps investing X for 30 years. Who ends up with more? "A" because of the time value of money.

BTW, if any one recalls the exact figures/ages please correct my post. I may not have the ages and length correct.


Great story. It's mentioned here:
(Great page btw, I bet FMF would agree!)


I would recommend index funds too for most people. Personally, I am really determined and I see this as a hobby, so I go with your number 2: "buy a few stocks like Buffet does". What I have found the greatest challenges so far (in that order):
1. buying the next hot thing
2. trading too often

My solution for number 2 is putting a realistic future value on the company and deciding in advance when to sell. The knowledge that your company is worth $x gives you the peace of mind to stick it out thru the hard times.

I haven't found a rock solid solution yet for number 1. One thing that will get you quite far already is giving extra attention to unpopular sectors (look at historical sector weigthings in the S&P 500).

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