The One Thing

In our journey through life, I think we can logically say that the more we learn, the better off we are. This observation fits neatly into the way we conduct our affairs, live our lives, and survive in this world.

Whether it is learning a new subject in first grade, revamping a supply-chain problem, or becoming a better parent, the more we learn, the better off we are.

When it comes to investing in the stock market, you can kiss this logic goodbye.

The less time you spend trying to learn everything about the stock market, the better off you are.

There is one thing you do need to know:

Historically, the returns of the stock market have been driven by a select few companies. This is likely to continue, which means that over the next twenty years, a select few companies will be outsized performers and all the rest will lag behind.*

The only way you can assure yourself of owning those outsized performers is to own them all.

Coffeehouse Investors accomplish this through ownership of low-cost index funds.

‘Nough said.
 
 Looking for ideas on how to integrate index funds into your portfolio? Contact me.
 
*Bessembinder, Hendrik (Hank), Do Stocks Outperform Treasury Bills? (May 28, 2018). Journal of Financial Economics