In his final column for the Motley Fool (posted August 30th), Morgan Housel reminisces about his early days and what he has learned in nine years with the multi-media financial services firm:
- Investment fees are falling. Investment costs are not. Housel writes that index fund fees now “round to zero. That’s a big win for investors. But the emotional cost of investing is as high as it’s ever been.”
- Most investment success boils down to avoiding catastrophic mistakes. In the past, Housel contends, “successful investing meant being on the inside, with access to the products and information required to do well. Today, every tool needed for success is available to every investor, no matter how small.”
- Most investing mistakes and frustrations come from trying to run a marathon in an hour. Diversified investing makes things straightforward and Housel advises, “If you leave it at that—and you should—investing is such a basic game that doesn’t require much action.”
- Progress happens too slowly to notice; setbacks happen too quickly to ignore.“It can take decades for companies to become valuable” writes Housel, “but bankruptcies happen overnight.”
- Few things are more valuable than room for error. Housel believes that “long term success has more to do with the ability to constantly shrug your shoulders at the world’s unpredictability than it does with being constantly right.”
- “Don’t do anything” is the best advice for most people most of the time. Investing, he says, is one of the few endeavors where there is a negative correlation between effort and results, especially for the inexperienced.
- No one is smarter than the collective intelligence of millions of other investors.That said, Housel believes there is still a “huge opportunity to gain an edge over most investors through patience and good behavior.”
- There has never been a better time to be an investor. “More people have access to first-class services than ever before. It’s so important, and we don’t spend enough time realizing how good it is.”
