Hi Guys,
I sure don't recall if Ted posted this article at the beginning of the New Year. If he did I don't apologize for the repeat because it does warrant a second look. Here is a Link to this insightful article:
http://www.marketwatch.com/story/dont-pile-into-the-best-performing-funds-of-2016-2017-01-03In the investment world only the first portion of Matthew 19:30 " But many who are first will be last, and the last will be first" holds true. Indeed among investment professionals, the first are often last in subsequent years, but also very often, the last simply disappear and go out of business.
The operative lesson here seems to be a persistent reversion-to-the-mean.
We may like to think that we are bold investors, but our successes when contrasted against a meaningful benchmark are not all that impressive. The actively managed mutual fund frequently fails to match an equivalent Index over the long haul, and most individual investors fail to match the payoffs of the funds they select for their portfolios. We don't stay the course. Here is a Link to an older Fool article that documents this shortfall:
https://www.fool.com/investing/general/2015/11/01/the-average-americans-investment-returns-and-how-y.aspxIt is not a comforting picture. The article does provide some guidelines that will help to decrease our wealth robbing proclivities. Again, patience and persistence are winning characteristics. Charles Ellis likes to recommend that staying within our zones of comfort and competence combine to be the sweet spot of investing. That's easy to say, but hard to implement.
All too often we fall victim to the forecasts from false gods. Nobody can forecast the uncertain future, but the itch is often irresistible. A simple and consistent investment strategy is likely to produce the most rewarding outcomes. I now practice that policy after decades of learning hard lessons.
Best Regards
