I may have posted this link before. Here's a few clips. How much investment income (or gains) can you rely on? Is it enough? Yes or no? If "no", keep working. If "yes", invest sanely and ignore benchmarks. That's it.
In my case, I can live off my dividends, so cap gain is irrelevant. (But I still expect cap gains based on economic growth of my companies' profits.) My performance vs index is irrelevant, just a curiosity. But if you need cap gains to live, or to retire, then you are in a different boat. And if you need investment home runs, you are in trouble.
For stock pickers -- I am certain that picking the correct sector is more important than picking the best stock. I am sure energy inventors would agree today.
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The first is part of the debate over skill versus luck in investing. Investors generally seek returns that beat a benchmark, known as alpha in financial jargon. But the reality is that alpha barely exists today — at least alpha that is achieved through skill and not luck....The solution to the mostly futile quest for alpha, though, is not to switch to being a passive investor alone...Investors want to invest with a long time horizon yet react to short-term swings that derail the strategy..
NYT
wishing someone investing "good"luck" is very appropriate. :o) |
