Did you know that boring investing is probably the best way to invest money? Slow and steady aka long term consistent investing has been proven to realize the best year over year returns. In contrast, people who time the market, buy and sell, look for the hot stock, generally earn 7% less than those who do boring investing like investing in index funds. That is why I say boring investing is the way to go, because it allows a stress free money life. Boring investing is a set it and forget it, with proper allocation long term strategy.
In a recent study done by fidelity’s 401K division, the accounts that performed the best over a span of a decade were the accounts of clients who passed away or forget about the accounts. Just let that sink in my readers. If you don’t touch your investments, move them, time them, guess what you will grow them.
I must admit I am guilty of trying to outsmart the markets too, as in the past I bought and sold funds, based on trying to own the fund with highest paying dividend amounts. If 1 fund paid more than the other fund, I would be pissed that I lost out on the opportunity to get more dividend income. I know for a fact I missed out on a lot of gains because I tried this foolish game of timing funds and would divert some money to go places that didn’t serve me best as far as capital appreciation goes.
Now going forward I am going to do more of the boring investing and instead will just increase the total investing contributions year after year until I can retire. Who wins the race at the end of the tortoise and the hare story?
You guessed it the slow and steady tortoise because that’s usually how it goes as you keep a steady pace. If you rush rush rush out the gate, you will feel burnt out and you might fall short. The markets are no different, and I think that story is a classic example of stock market newbies, who think about get rich quick schemes that rarely work.
Boring Investing is the Way to Go
Long Term Investing
Pick a Good Asset Allocation and don’t deviate
Increase Contributions and Reinvest Dividend Income
Don’t time any market, unless it’s the Supermarket, and you want to buy Milk
Investing is not that risky if you stick to a plan
Don’t Buy and Sell Hot Stocks
Do some Research
Look into low cost Index Funds and ETF’s
Don’t invest based on Get Rich quick Schemes – It rarely works
Automate it, Set it and Watch it, but rarely sell it.
These are the steps I take to continue my boring investing strategy. I believe boring investing is the best way to go, because it will give you the best results. The majority of your money should be invested in low costs funds, dividend stocks with 20+ years of paying history, REITS, and some bonds.
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Comment on Why you think Boring Investing is the Way to Go or Not?
Rich Uncle EL
Slow, steady and boring does win the race. I won't go as far and say set it and forget it, because when there is a drop and things are on sale it always a good idea to invest more if possible.
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Well yes if things fall, buy things on sale, mostly us PF geeks understand this. The average person is scared in a run off, and they cant understand why they should buy in a down cycle. But if they stay consistent with the plan, the regular contributions will buy when up or down.
My recent post Boring Investing is the Way to Go
That’s why my general policy is not to sell but sometimes if a stock goes out of favor it’s necessary. Buy and hold and buy again is basically my philosophy and it works. Most people when they sell sell off their best stocks. Which defeats the purpose they are probably looking to get.
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Yes I agree, it’s best to hold for long term unless the stock has red flags with management. Thanks for the comment.
Preaching to the choir. I'm all about boring investing, steady as she goes and a set it and forget it attitude with my dividend investing. I think more often than not a hands off approach to investing works best in the long run. Too often we tyr to "outsmart" the market thinking we know the best times to get in and get out of certain stocks or other investments when all along just riding out the highs and the lows would be our best bet. Thanks for sharing.
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Yes DivHUT I agree sometimes we are our own worst enemies. We can’t let emotions dictate finances, and should just ride it out. I will def look to stay on course and stay increasingly passive as wealth grows. Good Luck.
My recent post Boring Investing is the Way to Go
My father in law received shares of stock in UNH probably two decades ago. He honestly forgot about it until I started to receive dividend checks each quarter. After doing some digging we figured it all out and had the shares moved over into his account. It turns out that UNH is one of the best performing stocks of the last 25 years and he had no idea that he even owned it. Amazing how things like that happen!!!
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That's a great gift he didn't know about. Yes it has done well, and I don't see a sign for it to slow down with healthcare going up every year. Keep up the boring investing!
My recent post Boring Investing is the Way to Go
Boring doesn't sound that great, but it can lead to better financial results than the pros get. Just make sure to make small and steady investments and be "boring" like investing in an index fund. You just have to start somewhere and let the power of compounding take over. You don't always have to try to beat the market.