🧠 Should We Just Index?
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Friends,
Picture someone you care about — a child, a friend, your spouse.
Now imagine this person has found an activity that:
- Quenches their intrinsic curiosity
- Leads to a deeper understanding of the world around them
- Helps them connect with others who have a similar passion
- Is not inherently toxic or unhealthy
- Makes them money
If all of these things were true, would you ever pressure them to give up that activity?
We hope the answer is “of course not!” We want what’s best for those we love.
We bring this up because last week, Stoffel shared his portfolio with the Twitter-verse. He does this every month. He also includes his overall performance.
Over the past five years, he has doubled the S&P 500’s returns. But when compared to the NASDAQ, it’s break-even. That led many to (correctly) claim he could have saved himself a lot of trouble by just buying a NASDAQ index fund.
We don’t disagree with that conclusion. Instead, we’d zero in on the word “trouble.”
If investing is stressful, boring, myopic, or an unhealthy for anyone, we heartily encourage them to simply dollar cost average into index funds. There is, truly, nothing wrong with that.
But if you consider investing to be intellectually fulfilling — and you expand your network, mindset, and wealth along the way — then we think it can be an intrinsically worthwhile pursuit.
That’s the kind of long-term dynamic we’d select for our loved ones — and ourselves — every day of the week.
Wishing you investing success,
– Brian Feroldi, Brian Stoffel, & Brian Withers
In Partnership with Tim Urban
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One Simple Graphic:
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One Piece of Timeless Content:
Are you a parent searching for helpful advice to raise healthy and happy kids?
Michaeleen Doucleff, a global health correspondent for NPR’s Science Desk, traveled the world with her three-year-old daughter in search of answers. She published her findings in a book called: “Hunt, Gather, Parent: What Ancient Cultures Can Teach Us About the Lost Art of Raising Happy, Helpful Little Humans.”
This article tackles two key insights from the book. As parents ourselves, we think you’ll find the 8-minute read a wonderful investment.
One Twitter Thread:
We’re big fans of mental models. In this epic thread, Gurwinder breaks down 40 critical concepts that we think everyone should know.
February 6th 2020
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One Resource:
Earnings “season” is right around the corner. Want to know which companies are reporting this week or next? Finviz’s screener is a great resource. Simply use the “Earnings Date” filter to select your timeframe and viola!
One Quote:
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More From Us:
👨🎓 The next cohort of Financial Statements Explained Simply launches in May. Click here to join the waitlist and be notified when enrollment is open.
📗 If you’ve read Brian Feroldi’s book, he’d love a review.
👨🎓 The early reviews for Valuation Explained Simply are fantastic! Want to join the waitlist for the next cohort? Click here.
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