Monday, 8 November 2010

My favourite method for selecting investments (Part 1 of 4)

During the last sixty years, a myriad of investment books have explored different approaches to maximizing the return on your savings. Most of those theories have proved inadequate and, a decade after publication, few financial authors want to be reminded of the predictions they made.

Simplicity is another characteristic that is missing in most investment advice. Ideas that are too complicated to implement are as good as worthless. In the field of personal finance, what we need are prudent recommendations that anyone could follow as long as he is ready to exert a minimum of effort.

Rational investors should have a well-defined long-term goal. That objective should be, quite openly, to reach a point when they are able to live from the income produced by their savings. Such goal has motivated generations to put aside part of their earnings month after month.

To be continued in Part 2


[Image by Jeff Kubina under Creative Commons Attribution License. See the license terms under]

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