by Richard E. Reyes, CFP
The basic premise behind what I term Free Market Investing is that prices are determined via supply and demand. If demand is high, prices must rise to avoid a shortage. If demand decreases, prices must drop to induce purchase. It’s really very simple, although the randomness inherent within the process often runs counter to how the human mind processes data. Simply put, our brains don’t like uncertainty. We are junkies for the latest news and label a meteorologist as inferior if he’s right only 90% of the time.
This distaste for uncertainty is even more apparent when it comes to investing. We want to know what the market will do before it actually does it. But markets reflect the news of the day, which is far from predictable.
Our distaste for randomness has lead to an investment philosophy known as “Active Management.” But as the following video demonstrates, Active Management is nothing more than a very expensive way to speculate. There is a cheaper, and better, way.
A great video and explanation of proper and prudent portfolio management by Richard Ferri author of The Power of Passive Investing.
If you are looking for a brief, plain-English introdution to investing, don’t forget to BUY my book, Dirty Filthy Lies My Broker Taught Me & 101 Truths to Money and Investing. Order my book now and I will also send you my Investor Awareness Guide and listen to our The Seven Deadly Investor Traps that Destroy Your Wealth and the Three Power Strategies to Fix Your Portfolio Fast! These materials will equip you with the information you need to begin putting your investment experience back on track.
Wealth and Business Planning Group, LLC (The Financial Quarterback™) is a Registered Investment Advisor in the State of Florida that provides Fee Planning and Asset Management. Depending on your state of residence, Wealth and Business Planning Group, LLC (The Financial Quarterback™) may not be able to immediately provide services. For more information go to www.thefinancialqb.com. Richard E. Reyes, CFP is an Investment Advisor and President of Wealth & Business Planning Group, LLC (The Financial Quarterback™).