Investment Metaphor #4: Investment Blogging

Apr 9

Apr 9 Investment Metaphor #4: Investment Blogging

My last blog post about my individual stock picks had an interesting result. More reader comments were received about that post than about any other blog post I have made so far. While I would like to attribute this fact to an increase in readership based on my skills as a finance writer, I suspect the real reason to be far less self-inflating. Most of my blog posts to date have been about long term investing via a portfolio of exchange traded funds due to their reliable returns and lower risk due to the diversification of holdings that make up the ETFs. This is the slow and steady model of investing versus the day-trading model of "playing the market."

Don't get me wrong, playing the market is seductive: the chance of very high returns if you are the one that is lucky enough to pick the next hot stock before it takes off. The problem is...this really is just luck. Even stock picks from pros like Jim Cramer lose money just as much as they make it (I shall not even get started on Jim Cramer, lest my blog stir up a raft of controversy!). I, too, am tempted to join in this world of seductive and sexy market gambling, but each time I consider taking money out of my ETF portfolio to be put into individual stocks, even just a small percentage, I reply to myself that my money would really be better served by increasing my ETF holdings for the long term.

So my last post itself was a great metaphor for investing. Individual stocks are seductive and generate lots of controversy (i.e. more comments and opinions). Long-term ETF investing is quite boring, not as controversial (i.e., fewer reader comments), but the chances of success in getting rich in the long term are greatly increased. Far be it from me to tell anyone what to do with his/her money, but the prospect of gambling with my retirement money is not appealing to me. Maybe this post itself will generate more reader controversy (if only due to the Jim Cramer bashing) and someone could change my mind about individual stocks. Like any good philosopher, I'm open to having my view changed based on the presence of adequate reasons to do so. I'm admittedly a little skeptical, but please fire away!