Core Values of Passive Investing
Asset allocation
is the most important determinant of returns
Markets are
efficient
Passive investing
is the winner's game
Active investing
is the loser's game
Risk and reward
are related
Price matters, so
do transaction costs and expense ratios
Market timing and
stock picking don't work
Speculating is not
investing
Effective diversification
reduces risk
Dissimilar price
movement diversification reduces risk
Small cap stocks
outperform large cap stocks
Value stocks outperform
growth stocks
Global diversification
adds value and reduces risk
Investment policy
is the most effective antidote to emotions
Focus on the long
term, not the short term
Asset class/index
funds are the preferred investment option
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