Money is a funny thing. A behaviorist friend of mine says that the behavior associated with money is the same as someone that is having a secret affair. Money is something that we are not comfortable talking about in public, it tends to occur between two people and there is a range of emotion associated with the topic.
It is with this as a backdrop that countless advertisers seek to convince us that we need a financial planner. The impetus for getting a financial planner is usually due to other advertising or television programs that convince us to buy individual stocks online, then after we lose our shirt we seek a financial planner that teaches us what we should have done anyway. We do need a planner, but more because most of us don't have the time to do it ourselves, there just has to be a better way to convince us to get one. Pursuing my dreams, the focus of most advertising seems a bit thin when making such a big decision. By the way a financial planner cannot come from my bank that is asking me to go further in debt through a home equity loan at the same time they want me to buy random investment products.
In the midst of all this noise and multiple failed attempts to win at buying stocks I found Ben Stein and his column in the Sunday New York Times. Every time I listen to Mr. Stein I make money. In his most recent column called Sound Investing and Peaceful Sleep he has some simple investment advice which I think is worth sharing:
- Invest for the long haul
- The average investor cannot pick stocks
- Buy broad based mutual funds, index funds, exchange-traded funds and variable annuities (low fee)
- Look at the Morgan Stanley exchange traded funds, Fidelity and Vanguard low cost index funds
- Buy domestic funds, foreign funds, foreign developed markets funds, foreign developing market funds
- Consider the Fidelity Spartan Total Market Index fund (FSTVX - domestic stocks)
- iShares MSCI Emerging Markets Index fund - invests in developing countries (EEM)
-ishares MSCI EAFE Index fund for Europe, Australasia and the Far East (EFA)