Why do quantitative investment?
November 29, 2022
Show all

How to invest money wisely

NOTE: This post continues a discussion started on Quora

The easiest way to do this is to invest in an index fund (such as SPY, or IWM). This will give you market like performance (almost exactly, minus a fraction of a percent), market like risk, and almost zero brain cells used to manage the investment.

This screenshot, as with all the others in this answer, was produced by Equities Lab (https://www.equitieslab.com). I am a founder of Equities Lab. Feel free to email me at sales AT equitieslab.com

Making your money grow by 50% in 5 years is not bad! If you don’t like a particular style, or think a particular market is going to do poorly in the future, you can just use multiple ETF’s.

As expected, this diversified (Japan, emerging market, US small caps, S&P 500) basket of ETF’s did not perform as well as the S&P 500 itself.

Going back to 2000, we find the results are closer, though similar:

Even so, it should be clear that, for the long haul, investing in stocks is a relatively reasonable way to triple or quadruple your money.

Henry Crutcher is an avid family guy, board gamer (think Settlers of Catan, Puerto Rico, etc), computer nut, and all around geek. Hailing from Louisville, KY, he has noticed that the weather in Louisville is remarkably similar to the weather in Atlanta, GA despite the 407 miles that separate them. He has two daughters, one cat, and lots of trees. He loves the Miles Vorkosigan series from Lois McMaster Bujold, for its mix of SF, comedy and insight into how people work. He also comsumes more than his fair share of cheesy business/economics books, such as The Ascent of Money by Niall Ferguson, or Farewell to Alms, by Gregory Clark.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

This website uses cookies to improve your experience. By using this website you agree to our Data Protection Policy.
Read more