Bottom LineLesson 8. Summary
(1) Scams are extremely common and often subtle . Be vigilant.
(2) Avoid negative and zero sum games (e.g., gambling, day trading, options etc)
(3) Evidence suggests that you, along with experts, pundits, advisers etc do no better at picking stocks than a monkey throwing darts at the financial page.
(4) Picking stocks or mutual funds yourself is a waste of your time and paying someone to do it for you (e.g., a financial adviser) is a waste of your money.
(5) As in any game of chance, a few advisers/managers/pundits have occasional lucky streaks. Don’t be misled into hopping on board with their product because good luck can just as quickly turn bad.
(6) All markets have ups and downs–don’t try to second guess and time them. Statistics indicate that doing so will lower your return.
(7) Since 80% of stock trading is now done by professional fund managers, they essentially ARE the average–but their return to the investor is always decreased by the fees they charge.
(8) Thus, pick a low cost mix of index funds (with average returns) appropriate for your age and re-balance it once a year
(8) Use the time and money you save by enjoying your life and doing good things.
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