If we could only get retail shareholders to think and act like shareOwners, instead of people betting at the racetrack – those of us who want more democratic, more accountable corporations – would be half way there. Give everyone you know a copy of The Elements of Investing.
This book by Burton G. Malkiel, the bestselling author of A Random Walk Down Wall Street, and Charles D. Ellis, the bestselling author of Winning the Loser’s Game, teaches the principles of investing in the same pared-to-bone manner that Professor William Strunk Jr. once taught composition to students at Harvard, using his classic little book, The Elements of Style. Hat tip to Simonleon Sense.
The advice is relatively simple and very sound… and the book is free.
- Save early and regularly.
- Use the help of your employer and Uncle Sam to supercharge your savings.
- Set aside a cash reserve.
- Make sure you are covered by insurance.
- Diversification reduces anxiety.
- Avoid all credit card debt—period.
- Ignore the short-term sound and fury of Mr. Market.
- Use low-cost index funds.
- Focus on major investment categories. Avoid“exotics” like venture capital, private equity, and hedge funds.
- When investing in stock, think like an owner, not a bettor. (This last one is mine but those who take the advice of Malkiel and Ellis may be more prone to thinking like owners since they will be buy and hold investors.)