4 Things I Learned From The Wall Street Journal’s Jason Zweig

I recently finished reading a post from Jason Zweig. It’s about investing lessons and experiences he’s grateful for. If you missed the article, it is here. Below, for my own journal keeping, I highlighted a few things I learned reading about the things he’s learned:

Investing has never been this easy or this inexpensive. In 1992, when he was first writing about mutual funds, many were charging 8% sales commissions. Today, that’s totally changed:

“Today, you can buy exchange-traded funds, commission-free, with annual expenses as low as 0.03%. Invest $10,000, and $9,997 stays in your own pocket — where it has always belonged.”

Zweig has learned, over the years, that your own psychology is your greatest asset… or greatest enemy:

“Evaluating yourself honestly is at least as important as evaluating your investments accurately. If you don’t force yourself to learn your limits as an investor, then it doesn’t matter how much you learn about the markets: Your emotions will be your undoing.

If you’re investing for the long-haul, and buying companies you truly care about and have researched, you need to view the shares you hold with much more value than day-to-day swings in its share price. Yes — you’re able to trade shares within seconds from your brokerage, but your long-term investments should have more value to you than that:

“Graham also taught that stocks aren’t pieces of paper (or, in today’s terms, electronic blips); they are units of ownership in real businesses whose underlying value doesn’t change thousands of times a day.”

Risk management is not the act of viewing how right you can or will be. But also taking a hard look at what could happen if everything goes against you:

“From the economist and investing writer Peter Bernstein, who died in 2009, I learned about Pascal’s wager: You must weigh not only the alluring probabilities of being right, but the dire consequences of being wrong.”
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