I am turning 51 next month. I can’t believe how time is speeding up.
I am only 10 years older than Vanguard which turns 40 today. Vanguard seems to be a bit healthier than me. Josh ran some Vanguard numbers on his blog which are bonkers!
While I do not believe there is such a thing as passive investing I do believe the smartest form of active investing for 99 percent of the investing public is dollar cost averaging into a Vanguard S&P ETF.
If that makes sense to you stop reading now. You will of course miss some gold to follow…
The biggest surprise in my 50th year is how slow I move.
I wake up the same time and I go to bed at the same time and yet I get less done!
As I get older and everything around me speeds up I look to the stock market and all my investments other than cash as a place for outsized gains. Being slow and old is turning out to be an advantage. I could give a rat’s ass about the rigged markets, the cheating, the machines and the media. The machines will only get faster and I continue to believe the best strategy is to stand as far away from the noise as possible. Humans are what I care about and they are emotional. Humans chase (read this over and over). This fact makes outsized returns possible.
I saw this chart from Michael today on Amazon which really drives home how I think about stocks (he will be speaking at Stocktoberfest and is such a funny and bright guy):
The cost of huge returns. pic.twitter.com/HPwhQBSzbV
— Irrelevant Investor (@michaelbatnick) August 31, 2016
I do not want to match the S&P or beat it…I want to trounce it.
To trounce it (and not be a cheater), I have to take bigger than normal drawdowns. I am in one in Apple at the moment and Nike. I remember in 2008 on this blog when I finally got excited about Amazon with the Kindle and AWS. It has been a magical ride since and it covers up a lot of mistakes.
Most people can pick winners. Most people just can’t manage winners and most people let a few losers wreck their whole portfolio. I still make mistakes every day. Get used to it if you want to do anything but dollar cost invest in Vanguard.
I also love the process, the language of the markets and the people that I meet while I try to trounce it.
Also published on Medium.