WSJ: Financial Literacy
This is a good article from yesterday’s Wall Street Journal. It makes several points about active investing:
- You won’t get better by practicing active investment – you’ll just lose money.
- It’s hard to have more information than the investment professionals.
- Even with all that information, the pros have a hard time beating the market – after expenses, most of them don’t.
- Even if a pro beats the market, it could just be a fluke. Someone will beat the market, but that doesn’t necessarily mean they will continue to do so.
The first step to building wealth is to keep more coming in than is going out. The surest way to do this is to control spending. The next step is to invest the surplus wisely. Here at MilitaryMillions.com we’re big fans of indexed mutual funds. Step 6 of our Steps to Financial Security covers this in detail.
I encourage you to read that article. Some of the points made are debatable. I’d love to see some discussion on these (post a comment below if you have thoughts) – particularly number 8. I’ll have a follow up post on that one.