One of my favorite pastimes used to be just tracking my fledgling stock portfolio as it bounced around in value. That was when I had all the time in the world to devote to compulsively watching stock ticker symbols and catching the next market-shifting news on CNN Money. These days, I have no time nor energy to keep up with the daily blips in the stock market and not so coincidentally, we’ve adapted strategies to try to simplify our finances as much as possible.
But first, let’s look at the different ways people have invested in equities. They’ve done it through:
• mutual funds or ETFs
• individual stocks
• a stock broker or fund manager who constructs a custom portfolio for you
• index mutual funds or ETFs
• lifestyle or target funds
• other derivative financial vehicles
and a combination thereof. As time has passed, our investments have turned into a cornucopia of investments representing these various financial categories located in various financial institutions, and it has become one hairy matter to get a handle on everything.
In reality, you don’t need things to be so complicated. If you’re interested in participating in the stock market with a good chance of beating most investor’s returns while making it super easy on yourself, you don’t even need to hire a stock or financial pro to do it. It’s true: beating the average investor’s record is easier than you think. Note that this is not the same as beating the market, the difference being explained in this post.
So one thing we’ve striven to do is to prune what we have with the goal of ending up with something simpler, more basic, more manageable, and which still does the trick. If you want to participate in the stock market and don’t know how to begin, then what I’m ...