Don’t miss our new guide to passive investing
I know how hard it is to turn your head away from the economic and political
car crash news. Trust me, we’re rubbernecking with the rest of you.
However in a couple of decades Kwasi Kwarteng will probably be just an obscure answer in a pub quiz and Boris Johnson a contestant in a onesie on the 43rd season of Celebrity Big Brother.
And by then it will be your steady saving and investing that will mostly have determined your financial well-being.
Happily, my co-blogger The Accumulator hasn’t just been fondling his shrinking gilt funds and shrieking “My Precious!” as his 60/40-ish portfolio heads into the fiery abyss.
Oh no. He’s been keeping his head and updating our passive investing HQ. Which is our best attempt at explaining why and how you should base your financial plans around buying and holding index funds.
All on one page on the Internet!
What, why, and how
You have one very big choice as a private investor. Will you invest your savings passively in a systematic way? Or will you try to beat the market?
Choose carefully. As @TA writes:
The money invested by all active investors only earns average market returns, minus costs.
The set of all passive investors also earns average market returns, again after costs. That’s what passive funds are designed to do, and they’re very good at it.
But passive costs are lower.
The result is that passive investors beat active investors as a group.
Not a startling revelation to most long-term readers of this site. But there remain millions to be converted to passive investing in the wider world – and many more who need to know how to do it. We’re trying to fill that gap.
Check out our new passive investing guide. And please share any feedback in the comments below.
Keep it steady and all that. 🙂
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