The Most Important Lessons in Investing

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Over the last 10 years I have spoken to thousands of individual investors about their investments and financial plans while working at PWL Capital, and I have interviewed some of the smartest people in finance, economics, and psychology on the Rational Reminder podcast.
This is what I have learned. These are all lessons that investors will learn eventually, though many will learn them the hard way.
0:29 1. You’re not that smart (relative to the market).
0:42 2. This time is always different.
1:03 3. The market is forward-looking.
1:20 4. Market forecasts are not useful.
1:34 5. Time in the market beats timing the market.
1:47 6. Most funds do not beat the market.
2:12 7. Incentives matter.
2:26 8. Expected economic growth and stock returns are unrelated.
3:12 9. Good portfolio management does not make up for bad financial planning.
3:27 10. Risk and expected returns are positively related.
3:42 11. The risk-expected return trade-off has a term structure.
3:58 12. Fees and taxes matter.
4:12 13. Complexity and costs are positively related.
4:27 14. There is no single optimal investment strategy.
4:44 15. The best investment strategy for you is the one that you can stick with.
5:00 16. There is no such thing as a “passive” investment.
5:14 17. Wealth does not give you access to market-beating investments.
5:30 18. Diversification is (still) the only free lunch in investing.
5:44 19. Investments should be evaluated on process, not outcome.
5:58 20. Investing has been solved.
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Опубликовано:

10 апр 2024

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Комментарии : 294

@EverlyndPerez 10 дней назад

I’ve been saving for a long time instead of investing, and right now I only have about $516k. I'm not sure how to make it grow, considering all the inflation, into something substantial that I might use for retirement. I just here for ideas

@Debbie.Burton 10 дней назад

At a point like this, when the pressure is already on you to retire, its best recommended you seek the services of an advisor, as this allows you make smarter investing decisions.

@benitabussell5053 10 дней назад

A good number of people discredit the effectiveness of financial advisors in exploring new markets, but over the past 10years I’ve had a financial advisor consistently restructure and diversify my portfolio/expenses and I’ve made over $3million in gains… might not be a lot but i'm financially secure.

@A_francis 10 дней назад

Can you share details of your advisor? I want to invest my increased cash flow in stocks and alternative assets to achieve financial goals.

@benitabussell5053 10 дней назад

*Sharon Lynne Hart* is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.

@Theresaa12 10 дней назад

I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.

@bc41 Месяц назад

write a book Ben

@wexwexexort Месяц назад

i would read.

@Adrian-cn5rk Месяц назад

Two versions please. A dummies version for me

@zacharyanderson5878 Месяц назад

I would read too

@JLchevz Месяц назад

indeed

@tarekyared4404 Месяц назад

YOU write a book.

@superkebabi Месяц назад

This is the kind of thing you save and come back to every year to keep your head on straight. Thanks Ben.

@longpham3986 26 дней назад

This is the kind of things you save and come back to every time you see a bear or when your emotion gets the better of you!

@TheWealthyBarber 12 дней назад

Hey Ben, it's Dave Chilton, The Wealthy Barber. I enjoy your videos and podcast, especially this one! You're well-informed and very genuine. It's clear you really want to help people. Well done!

@BenFelixCSI 12 дней назад

Hey Dave! Thanks so much. That means a lot coming from you. I saw the new initiative you’re working on. I’d love to contribute. Don’t be shy to reach out.

@danguee1 12 дней назад

I have to say I had doubts about you when I watched my first video of yours earlier today. I thought you sounded a bit simplistic and suffering from recency bias. But I now think of you as a) very grounded b) very knowledgeable and well-read c) excellent communicator who doesn't dumb it down (though also good at 'normalising' jargon and hard concepts for ordinary viewers) and d) as such, a 'force for good'. Excellent stuff! Given my belated determination - after a decade of now embarrassing-looking investing mistakes - to move from picked stocks and a few managed funds to index trackers, consider me subscribed....

@spartan19752008 Месяц назад

Ben, you are precise and perfectly paced. The advice is articulated simply and comprehensively. Your channel is invaluable In a world of ever-increasing jargon, excess information and incentivised bankers and finance influencers.

@bulalirozani4392 Месяц назад

Its rare that you find content creators who are clear concise and provide information without ulterior motives, "Incentives Matter" the financial services industry still has along way ti go in offering and catering to the needs of consumers rather than the needs of the suppliers, this is despite regulation.

@Nounooon Месяц назад

It’s more than rare, he’s unique

@santiagoeguren6837 Месяц назад

you are one of the few who speaks based on evidence!!!

@dimon22323 Месяц назад

Way too many good advices for single short video! Much appreciated.

@pongop 2 дня назад

Thank you for the interesting lessons!

@user-ph5tv8nt9y Месяц назад

Excellent contribution: full of common sense, pragmatic and simply announcing the basic rules. Thanks a lot.

@kylebeggs2617 29 дней назад

I would like to request a video on your background and career journey. As a mechanical engineer who has become more interested in finance, I find it intriguing that you began as an engineer and ended up here. You have quickly become my favorite financial resource and I suspect it is because you approach and explain things that make perfect sense to me. As you would suspect, I believe it is due to our similar backgrounds. Keep up the great work!

@robertchaplin 10 дней назад

Ben I do not pretend to be an expert but over the past 40 years I have found out the following: not nearly enough attention is given to time, secondly statistics plays a much more important role than generally recognized and three years ago I bought a book entitled “Against the Gods, the remarkable story of risk”. To me the book mentioned is a real eye opener, it is now my foundation in this area. Finally thanks for all of your help in this field, it has been helpful even though I am not Canadian.

@jamesreid-lourie5636 7 дней назад

dang, i haven't watched ben's videos for a while now. good to know he's still the blink champ. thanks ben!

@ryanlee7998 Месяц назад

Was just reviewing my index investments and this video popped up. You've got a new subscriber. Going to keep this video saved to come back to so i can stick to the plan lol

@luiscunha6657 Месяц назад

A short Masterpiece. Thank you so much.

@bigdogtom55 Месяц назад

Thank you Ben, for your great insight...

@jasonmacfarlund2703 Месяц назад

You are absolutely the best.

@TheSpacePope001 Месяц назад

Investing in yourself can be one of your greatest assets. Learning a new skill and being able to sell that in the form of a product or service can yield far greater returns than market average.

@albertotoia Месяц назад

Just wanted to say thanks. Your videos leave a lot of value (and not the factor) and consciousness to investors. Really, a lot.

@m136dalie Месяц назад

I appreciate your transparency, it's makes you one of the only people creating investment advice that I find trustworthy. You're a finance advisor you who tells people they don't need to pay high fees on mutual funds or even finance advisors. The solution is a boring but smart strategy of investing in low fee ETFs with realistic expectations for returns. When it comes to investing, boring advice is sensible unlike a lot of other sensationalist takes.

@user-gz6mz9oh1q Месяц назад

Thanks Ben for making it all simple for us.

@lucian2643 Месяц назад

Thank you very much for your work and this video too.

@douglaschester2097 Месяц назад

This is amazing. *“How to build wealth”*

@douglaschester2097 Месяц назад

The first step to building wealth is figuring out your goaIs and risk toIerance - either on your own or with the heIp of a financiaI pIanner, and foIIowing through with an inteIIigent pIan, you wiII gain financiaI growth over the years and enjoy the benefits of managing your money.

@douglaschester2097 Месяц назад

I am fortunate I made productive decisions that changed my finances (gathered over 1M in 2years) through my financiaI planner. Got my 2nd house in Feb, and hoping to retire soon. Give this a try and attain good-returns.

@douglaschester2097 Месяц назад

researvh the name, if you care.

@douglaschester2097 Месяц назад

REBECCA MARTIN WATSON

@raosiddharth4726 Месяц назад

I try to read the papers which you mention, those papers do give a lot of insight into results and time frame of methodology applied. Truly amazing videos you put on

@user-wb8fd1kp7y Месяц назад

I would add: these most important lessons are also applicable, relevant and appropriate to investors living in south equator countries like me. Thank you very much, indeed Mr. Ben Felix.

@kadams842 Месяц назад

As always, great advice. Thank you, Ben

@ZacharyDuvallT Месяц назад

Love it, thanks for sharing!

@benjaminramsey4695 Месяц назад

Excellent list, well stated and summarized!

@wendynoble6545 Месяц назад

This! I'm going to have to listen a few more times.

@Capatron1 Месяц назад

Man this is gold, is like summing up a huge part of your videos! Commenting so you get to know it is much appreciated and so it gets the algorithm to show it to more eyeballs

@gus_720 Месяц назад

Would be great to see a RR interview with Robert Shiller!

@darioahmadzadeh2143 21 день назад

Just discovered your channel, love the straightforwardness and no bullshit beating around the bush. Keep it up! Got yourself a new sub

@PassRush49 Месяц назад

Excellent summary of investing everyone can learn from.

@jameszeng2666 Месяц назад

This is so true. I am 100% into this.

@fbt0815 Месяц назад

insanely good content on this channel. thanks, ben!

@lesleyjohnson8488 Месяц назад

This is awesome, Ben - well done 😊

@jugzster Месяц назад

Investing into your or other people's happiness is also important. Sometimes those can even give you more satisfaction than seeing your net worth go up. Whether it be on improving yourself, going on experiences with family/friends, donating, or buying that small dessert Another valuable video as usual, thanks Ben!

@pegah_on_the_road 23 дня назад

I have a lot of respect for you. Absolutely great work. Thanks a lot.

@nixes1636 Месяц назад

Great video. Great points and totally agree with all of them.

@Hengst94 Месяц назад

Fantastic video! Thanks for the quality information.

@thiagosouza9542 19 дней назад

Great! Thanks a lot.

@CleanCereals Месяц назад

Love your content! Your and James Shack's videos really educated me about investing in the last couple of weeks. Finally started to invest in the MSCI World SRI :)

@jpfontenele1650 Месяц назад

thank you

@KnowArt Месяц назад

Another big one I've heard: Financial markets are much more efficient than you think, non-financial markets are much less efficient than you think. That one opportunity you see in the stock market is bs, while that opportunity you don't act on in the real world because "if it was a good idea someone would've already done it" is actually a huge loss.

@venkatinator Месяц назад

To the point. You are the best. Keep it up!

@terryadams1830 Месяц назад

Ben, you are a national treasure. I hope Canada appreciates you as much as your friends below the border do!

@CanadianFinanceSimplified Месяц назад

You're the best Ben and obviously the main influence to my investment philosophies.

@samuelmandel4537 Месяц назад

Fantastic

@istvannagy1849 Месяц назад

Very insightful as always

@GkDann 28 дней назад

If my wife and i never invest another dollar, we will have 1.9 million at retirement. This is why people say to do everything in your power (Legally and morally) to get $100k+ invested in your 20s.

@Hajesse 28 дней назад

What advice would you give to someone new to investing with around $200k to begin with?

@GkDann 28 дней назад

I believe every investor should start with ETFs for a solid foundation, then diversify across asset classes and maintain disciplined, regular investing to minimize risks and maximize growth.

@Maniakkkkkk 28 дней назад

You don't need to find the next Apple to succeed in investing. Just choose top-notch ETFs and partner with a financial advisor like I did. I turned $20k into $10k in annual dividends-a significant milestone for me today.

@Wendytsang12 28 дней назад

I've been considering getting one, but haven't been proactive about it. Can you recommend your advisor? I could really use some assistance.

@Maniakkkkkk 28 дней назад

She goes by ‘Jill Marie Carroll’ I suggest you look her up. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.

@bearcreekmanager1283 Месяц назад

Ben, your advice is all golden and I agree with it. Distilling everything out, the basic message is: "put your investible money into the market as soon as you get it - don't time it, don't DCA, don't look at it (too often)". The basic premise is the market is a long, gradual incline. My question for you: is there any magic to getting out....or do all the same rules of getting in apply exactly in reverse (aka get out whenever you need to)?

@IAmebAdger Месяц назад

I would imagine since time in the market is so important, that logically leads to two things: get into the market ASAP, get out of the market as slowly as you can.

@Earth3077 Месяц назад

@@IAmebAdger Agreed, although you should get better results with a little flexibility depending on recent performance. A variable withdrawal rate can reduce the risk of running out of money while increasing the amount you withdraw during periods of good returns.

@haroldspanier9185 Месяц назад

Best advice yet from Ben Felix. A true pro willing to share his knowledge and experience. Thank you!

@tiagosantos680 Месяц назад

Briliant video to keep being reminded of our place, thanks Ben

@WarmstarX Месяц назад

Great summary! Need these on a poster. Important corollary to the risk discussion that I do find is often missed: higher risk does not always mean higher expected returns. Only compensated risks do that.

@saulomariano3800 Месяц назад

Great content, Ben!

@skzion2 Месяц назад

Nice job.

@susymay7831 Месяц назад

Really, really good video with nice timestamps!!! ❤

@RDM1776 Месяц назад

Great video! Related to financial planning, an investor needs to know their goal and their risk tolerance.

@sopcaja Месяц назад

Thank You Ben for these invaluable lessons. I love the last one :) Call me Boglehead but I will stick with my low cost index fund :)

@RyanStoneham Месяц назад

Excellent video, Ben (as usual). Any chance you can create a series out of this and expand more on each topic?

@user-cx8cm2ht2z 21 день назад

Only thing I disagree with is that wealth doesn't give you market beating opportunities. Private equity, angel investing - ok it's not passive and more like an active job of scouting promising startup but a non-wealthy individual cannot reach startup kind of returns. Also, to the extreme, pick any billionaire. They can use stocks as their collateral for loans and never pay them back by taking another loan just postponing the expiry date. Something that again a standard investor could not do. Btw, well done Ben, love your videos, always!

@nkjoep Месяц назад

Woah. Many problems have been solved. It doesn’t make them any easier. Great vid and lessons 🤙

@joshsantos9965 Месяц назад

Does buying 100% VT in my retirement accounts make the most sense to buy the market? I’m 30 years old in the US and feel the FTSE Global All Cap Index makes the most sense for low cost long term index investing.

@michaelherrlich1536 27 дней назад

The videos compresses a lot of information and is still short. Well done. "This time is always different" is a bit odd. The well known narrative I know that is not true is "everything is different this time" when people think old knowledge is no longer true and then suddenly a bubble pops. Your combo of the theme changes but the playbook is the same is aiming for the narrative I mentioned just in a somehow confusing way :)

@charlesvincett84 24 дня назад

Great video..

@lystraeus- Месяц назад

Thank you for the practical exercise at the end, Ben. As a financial advisor, you'd end on the importance of financial planning, as that is where your incentive is. You even told us you'd do that during the video! Thanks again. BTW what do you think of the "second free lunch": volatility prediction? It's allowed by the EMH.

@BobDobbs681 Месяц назад

Good video. I have a sense of most of these notions but find it hard to convey them to others succinctly. Next time I'll have them watch this video.

@MoementumFinance Месяц назад

Thanks for sharing. A lot of wisdom for both new and experienced investors 👌 As Ben nicely pointed out "For most people, investing in a portfolio of low-cost, total market index funds is good enough, even if it is not perfect". 👏

@evanwheeler7687 Месяц назад

I would even go so far as to say that investing in low cost index funds is close to perfect if we take profitability and ease of management into account. The alpha you may miss out on by investing in low cost index funds is very low compared to a relatively more complex factor portfolio that may not even win, anyway. Also, if it's easier to stay invested by buying and holding index funds, then that's a tangible benefit over more complex strategies. I say this as someone who holds significant positions in factor funds like AVUV. Index funds are one of the greatest financial inventions of the 20th century.

@AlexFlavell Месяц назад

Go Ben! Go Ben! Go Ben!!!

@vojtechsulc5899 Месяц назад

Nice summary. :-)

@CanaldoHolder Месяц назад

10/10

@joseraulmachadofernandez9744 Месяц назад

Best Ben Felix video ever. Actually, if you ever write a book, just use this lecons for chapters and I'll be the first one to buy a copy.

@julies3490 Месяц назад

Thank you Ben.

@ZelenoJabko Месяц назад

cat felix

@henrymakepeace Месяц назад

Excellent. Maybe you could mention how important margin of safety is. When you lose money, it gets harder to get back where you were. Also Munger's words, investing in good companies at fair price is better than investing in mediocre companies at low price in the long run.

@Martin_Edmondson Месяц назад

"The stock market is a device for transferring money from the impatient to the patient." - Buffett. Having a long term mindset was what helped me the most in growing my money. It's hard to do especially when you are young, but it is absolutely astonishing how much difference it can make.

@brianwhite1189 Месяц назад

ARK was my hard lesson. I didn't listen, until I did.

@petergianakopoulos4926 Месяц назад

No one. No one beats the market over long term.

@wendynoble6545 Месяц назад

One lesson I would add is "investing should be boring". Excitement is for day traders, and day traders don't get wealthy.

@idontlikeyouyo 27 дней назад

I agree with all your lessons, except one. I AM smarter than the market. ;)

@CanadianOptionsTrader Месяц назад

Here's one that I learned: Someone's confidence level when they speak about the market does not necessarily correlate with their success rate. High confidence does not mean the personal will end up being right more than anyone else with an opionion about the market.

@me0101001000 Месяц назад

I said it before on another one of your videos, but I'll say it again. One of my business professors in undergrad told my class that unless we plan on joining a big name hedge fund with lots of powerful research tools available, don't day trade. Just dollar cost average into a broad market index fund, and take the time you would have spent looking at charts, and spend that time learning three things. One thing that's useful, one thing that's interesting, and one thing that's just plain fun.

@nanobrains 28 дней назад

Thanks as always for the great content. Would love for you guys to do an episode with someone from BlackRock😁 or Dimensional on all the detailed steps of launching and trading an (index) ETF. Say for example a new WorldWide fund with the Fastest Growers. -What are all the (legal, administrative, sales, listing, etc....) steps that need to be taken to get this WWFG ETF listed. How would the first price be set. How does the redeeming / trading of the underlying work with the brokers etc.. ..and what would be a success...or when would it fail. Anyway ...just an idea ! Thanks again

@koltonbellamy3777 Месяц назад

Wow this is an incredible amount of high quality information in such a short time. My brain is exploding cataloging all of this and confirming what I already knew. Thank you Ben! I am saving this for later and to share to my friends. What a great video!

@petert834 Месяц назад

This is great! So much info in what is basically bullet point format to make it quick and easy for people to digest. Then if they want to dig in any deeper on any one point then they can. Only additional point I would make is part of "You're not that smart" and "Incentives matter". Basically, that all these investment gurus you see on social media also aren't smarter than the market, and (like so much of social media) are usually trying to manipulate you for their own profit. Even some of the ones who may think they that are well-meaning and just helping others by educating them by doing some research into stocks/funds for them are still trying to build an audience which in turn affects the content they focus on. That content can still lead people to feel better about making not-so-good decisions. So they'll talk about things like high-flying tech funds/stocks, or covered-call ETFs to get really high yields where they might tell you how QYLD is actually bad, but hey JEPI is a lot better! So people buy JEPI instead of QYLD when really they should not be buying either one.

@ramilrahim0v Месяц назад

Stripped down to the bones, but all absolutely true

@DevilsClaw Месяц назад

I wanted to send the Rational Reminder video to several friends, but was not sure because it is too long. This is a great summary!

@kenwen7791 Месяц назад

I've watched your videos for a year now and coming as far from asking on Ben Graham's asset allocation advice to understanding index investing. I've concluded this might've been the best finance channel I've come across so far... There is just one thing I have in my chest that I'd appreciate if you'd like to answer Ben... Question : Isn't factor investing more psychologically demanding than market cap weighted index fund investing? If so, by how far? Is it worth the trade off for the psychological aspect of say, seeing your AVDV or other factor tilted index etf lose to VTI or VXUS and the extra volatility that comes with it? This comes after watching one of Strongman's Personal Finance RU-vid channel suggesting that factor investing is somewhat unnecessary and we should stick with market cap weighted index ETFs instead. Thank you in advance Ben.

@genorgeanaplaszio1246 Месяц назад

Always great to watch your videos, thank you

@_BoomShakalaka_ Месяц назад

Thank you King 👑

@FinaISpartan Месяц назад

Important lesson: think critically when getting advice from anyone, especially r/pfc

@gregh2367 Месяц назад

What's pfc lol

@rawzey Месяц назад

personal finance canada subreddit

@tomlxyz Месяц назад

Only trust wsb

@kenwen7791 26 дней назад

@@tomlxyz what's wsb?

@stonks4days1 Месяц назад

Love your work buddy. Going to keep saying it and manifesting until it becomes true. Make an ETF bro.

@JuanTutors Месяц назад

This video is so dense. It's like, "here are ALL the lessons".

@tullyparker Месяц назад

I feel like you could apply this advice to other challenges in life. Just replace "investing" with X other thing. :)

@fsdds1488 Месяц назад

My portfolio is still mostly stock picking for mostly one reason: I simply enjoyed making decisions myself, so my goal wasn't market beating performance but similar to long term market return. But my retirement fund was 70% total market ETF, 20% US market ETF and 10% in savings.

@RambNL94 Месяц назад

Hi Ben, great video! Could you elaborate a little on point 16? I see my VWCE All World ETF as pretty passive for my time horizon (currently nearing 30 y/o), feeling like I shouldn't change my monthly deposit as a % of my income for at least the next 10-20 years. Am I too passive and should I be doing more or paying more attention? If not, what did you mean by there is no such thing as a passive investment?

@BenFelixCSI Месяц назад

For example, VWCE is slightly different from ACWI. Indexes may weight things differently or include / exclude different countries or stocks. The point is just to understand why you have chosen a certain fund beyond it being labelled passive.

@jeroen7356 Месяц назад

Great lessons! I do think not all indexfunds are alike. There are enough etfs with good returns.

@luizpalma1627 Месяц назад

100% agree. From Brazil.

@MrBlue425 Месяц назад

You should add a donate button 💰💲so we can support you. We absolutely love your unbiased highly informative videos. Everything else on RU-vid is just financial click bait entertainment to get views. Your videos are well researched and proper investment fundamentals .