Investing Lessons from 2018 by Larry Swedroe

jmcdonald |

Don’t actively manage your portfolio. The stock market and the economy are two different things. Market forecasters should be ignored.

Those are just three of 11 lessons that Larry Swedroe examines in his annual review of what the markets taught us over the previous year. Some lessons are repeats. Swedroe, chief research officer for the BAM ALLIANCE, writes, “Unfortunately, too many investors fail to learn them -- they keep making the same errors.” His three-part series walks through many of the mistakes many investors make and the value of having -- and adhering to -- a prudent, disciplined investment strategy.

Part 1: Lessons 1-3

1-Don’t play the active management game

2-Diversification is always working

3-Don’t make the mistake of recency

Part 2: Lessons 4-7

4-Volatility Doesn’t Stay Low Forever

5-The Stock Market and the Economy Are Two Different Things

6-Ignore All Forecasts

7-“Sell in May and Go Away” Is the Financial Equivalent of Astrology

Part 3: Lessons 8-11

8-Inflation Isn’t Inevitable

9-They Are Called “Risk Premiums” for a Reason

10-The Diversification of Risky Assets Is as Important as Ever

11-The Road to Riches Isn’t Paved With Dividends