The Ultra Boring Investment Fund
So I face an uphill battle. First, I’m trying to beat professional money managers at their own game. Second, I’m going against the Efficient Market Hypothesis that claims I can not consistently do better than an index fund. Third I have a full-time job, a wife and child so my time is at a premium.
On the other hand, I have a few things in my favour.
- First, I can’t be fired. It’s my money. Investment managers often are hired and fired depending on how they fare, but usually little of it is there own. If they lose it, they’re out a job. If I lose it, I have to take on a second job to pay it back. That’s a substantial difference in motivation.
- Second, unlike the professionals, I can follow a customizable financial plan combining a passive investor stance with a few enterprising investments. I’m in complete control… assuming my wife agrees.
- Third, spread and transaction fees. Buying small blocks is cheaper than buying in large blocks. I can buy 100 or 1000 shares easily without moving the market. But buying 100k or a million shares will push the market up and cost the buyer more.
Will keep you posted.
