Efficient markets theory says it can’t be done, but…
A Simple Investing Method that Beat the S&P 500 for 17 Years (and Counting)
All it takes is a bit of knowledge and Morningstar…
In the past 27 years I went from a complete novice in all things investing to a reasonably good understanding of the topic, though I’d hesitate to call myself an expert.
I started out investing in mutual funds in 1992. As I learned more about the topic, my investments did fairly well, and I started to gain confidence.
Bad Things Happen When Confidence Outstrips Expertise
About 15 years ago I sold my house and had some cash to invest. Being over-confident in my investing knowledge due to the good results I had with my fund picks, I thought I could pick individual stocks too.
Luckily, I was smart enough to limit this experiment to a small fraction of my portfolio.
Things looked good for more than a year. My picks kept up with the S&P 500 index, even edging it out at times.
Then the bottom fell out of the market. One of my picks, shares of a large bank that paid a rich dividend, lost 90% in a painful two years. Ouch!
