Mid-November, the fall season, a metaphor for retirees and late-stage professional athletes, and the beginning of hope for Dallas Cowboys fans unlikely to be realized as their team attempts to make the Super Bowl after 27 years of futility. It is Thanksgiving week, the shopping season, and that time in the semester when my students study investments, common investment strategies, asset allocation, and the evidence that actively managed mutual funds are not worth the expense structure imposed by their management teams.
Malkiel was my introduction to investing. Great article!
I am surprised by the amount of people who do not maximize their employers defined contribution plan. Of course, I do not know those people's financial situation. From my perspective, even though I may have to cut back on expenses such as clothes shopping or eating out now, I would be saving money for later on in life which would increase my living standard in retirement.
Both of my parents are accountants, so I grew up learning about the stock market and hearing pieces of their conversation. Much of what I heard aligns with advice in this article (especially investing in index funds). However, this article explains further in depth the steps and reasoning which equips me to make better decisions about investments.
It is interesting to learn the shockingly high percentage of people that choose not to take advantage of their company matching retirement contributions. Besides the possibility that employees think that they're unable to afford to contribute more to their retirement account, it seems that many are simply uneducated about what "matching" really means. Nothing in life is free, but being matched to a certain percentage by a company when contributing to a retirement fund sounds like free money to me.
I thought the lack of employee matched retirement contributions was a very interesting fact that I hadn’t previously considered.
I found it interesting how for stock picking if the fund manager had the one unique investing strategy no one would come across this strategy.
I overall thought this article was very interesting as though I have learned these concepts in class, it was interesting to have it all laid out in front of me as a soon to be college grad. I thought it was important to mention (like you did) to never just fully buy into a certain idea, such as “free money” as there is always certain drawbacks you must be willing to accept.
As a college student in their early twenties, I have always been encouraged by older peers to invest, but never really understood on where to start, as it is a successful, yet intimidating way to earn income besides a full-time profession. Upon hearing Burton Malkiel and his upcoming book, I've heard about his financial work as an economist and how he supports in holding index funds and recognizes it to be the most effective management strategy. What stuck out to me was learning the three paths for building an investment for oneself: investing in an index fund, contributing a small percentage of savings into individual stocks, and recognizing the content of an informative financial press. While investment is a risky strategy to produce income, I find that these steps are the most reliable when starting out in stocks as a rookie.
This article is very helpful in outlining the most important information everyone should know regarding investments. It is applicable to students and adults in the working world, whether we are well-versed in stock investments or not. These 3 steps are crucial to making intelligent investment decisions. I especially thought the part about avoiding stock picking and investing mostly in index funds is important. I have always wondered where to begin with stock investments, and knowing this is the best place to start is very helpful. I also appreciate the suggestion on the 2023 version of Malkiel's book: this will be a purchase for both myself and my brother who is now extremely interested in the life-cycle economics model we have been studying after I performed my financial analysis and report for him and his wife.
Great to know Brooksletter that you are an economics-based planner. Every potential client south of the red river needs to find you. BTW, I am all in on Coach Dykes and the Frogs taking it the distance.
Another solid article from Bob Puelz. I’ve adhered to these principles for years now and try my best to help clients to do the same. Although mustangs and horned frogs aren’t best friends, we can still learn from each other.
I found this article to be very engaging because it is information that every investor should know. The notion of deciding how much of saving to invest, finding and deciding where to invest, and deciphering the enormous and often confusing statistics with each investment can be extremely overwhelming. As someone who currently has a portion of my savings invested, I found this article, and the entirety of this class, to act as my personal guide. It has helped me sift through common myths that I unfortunately believed, learned how to properly understand and analyze pieces of information such as the pe ratio or ratings, and I was provided with many online resources. This article is a summary of all the information that I have learned over the past month or so, and it a great resource to refer back to for continuing my investment journey.
interested in investing seeks to find out and should know.
Obviously, when reading Substack posts we, as students, are reading about broader topics within the world of finance and investment, but one thing I personally always enjoy—and look forward to—is the humor unique to the SMU community and our class in general. I have definitely been an app holding Starship orderer at one point or another. Regardless, I also enjoy that we refocus on the methods and key concepts we go over in class, as well. While the top three recommendations from this post recommend investing in an index fund, investing a small percentage (5 - 10%) of savings in individual stocks for fun, and considering the vibe, I feel rather comfortable with these topics already, or rather familiarized, because of our course and discussions we’ve been having twice a week over the past few months. This gives me a sense of confidence that I am already more knowledgeable on topics of finance than I was before.