We’ve spent plenty of time explaining why investing in passive, low-cost index funds will out-earn actively managed funds in the long-run, and that most fund managers can’t even outperform the indexes they’re trying to beat over time.

The underlying theme of these posts is that stock market “experts” aren’t really experts at all. They may be able to get lucky over a short period of time, but the longer they invest, the less likely they are to continuously beat the market. (Even Warren Buffett says that most investors should choose index funds.)

But professional investors should have some real knowledge of beating the market, right? Isn’t that why they do it for a living?

Enter monkeys throwing darts.

The Wall Street Journal’s Dartboard Contest

In his popular personal finance book arguing that investors can’t consistently beat the market (A Random Walk Down Wall Street), economist Burton Malkiel says that “a blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.”

Sounds like a challenge.

Read more >>

{ 49 comments }

Please Ignore This Advice

Remember how most fund managers can’t offer you anything except lower returns and higher fees? Well, in response to the economy, more fund managers are beginning to actively manage their clients’ accounts — and abandon the tried-and-true strategy of buy-and-hold. From the Wall Street Journal – Advisers Ditch ‘Buy and Hold’ For New Tactics (via […]

Read the full article →

How Automating My Debt Payments Saved Me Serious Money

We often talk about financial automation as a convenience. Instead of having to remember to pay your bills before their due dates, they’ll get paid automatically. But for some bills, there’s actually a financial incentive to automating your payments. While some service providers (like Sprint) may give you a one-time credit for automatic payments and […]

Read the full article →

The Secret Fund Managers Don’t Want You to Know

If your investments are being actively managed, your fund manager is likely keeping a big fat secret from you. He doesn’t want you to know it, because he’d lose your business. But it’s costing you money every day — your money. The secret? Most active managers can’t even top the index they’re trying to beat. […]

Read the full article →

In This Economy …

How are you doing in this economy? If you’re watching too much TV, you may think that it’s impossible to succeed right now. But that’s not the case. Check out this brilliant video from the folks at thefullginsburg.com to see one of the most-used phrases on TV today.

Read the full article →

The Balanced Budget: Every Penny Has a Purpose

When I first started tracking our spending, it was mostly to determine where our money was going. Although we had spending targets set for each category, we weren’t really sticking to the numbers — just aiming to be around them. While that system works for us, you may need something like the envelope system to […]

Read the full article →

The Once-in-a-While Fund: How it Works

If you’re like me, you’re always surprised at how expensive that car insurance bill is or how much you really owe in taxes. The expenses that you don’t pay on a monthly basis can often sneak up on you before you have the money to pay them. These bills could include: Insurance (auto, homeowner’s, renter’s) […]

Read the full article →

3 Ways to Plan Your Retirement with a Reverse Mortgage

As you get older, the concept of retirement changes from some nebulous future concept to something far more immediate. There are a multitude of ways that you can begin preparing for your retirement financially, from looking at the status of your 401k to rearranging your budget around your savings and Social Security. One powerful tool […]

Read the full article →

What Loan Options are Best for Veterans?

There are currently over 18 million American veterans, and many of these may struggle financially when they return home. Getting back to everyday life, finding a job, and dealing with a poor credit score are just some of many things veterans have to deal with, and finding a loan shouldn’t be another on the list. […]

Read the full article →

Crypto Fraud Exposing Legacy Banks to Compliance Issues

In 2019, cryptocurrency crime losses reached $4.5 billion, according to a CipherTrace report. Let’s discover more details and find an exceptional high risk merchant account for your eCommerce business. Crypto Fraud Losses Cryptocurrency-related crime losses more than doubled in 2019, thus making up $4.52, as blockchain forensics company CipherTrace reports. The majority of the crimes […]

Read the full article →

How To Get A Loan With Bad Credit

People with bad credit could experience much higher costs for the financial products they qualify for. Alternatively, they may have been rejected for credit or loans altogether. Data shows that UK adults are at a new all time low for their confidence and ‘financial knowledge’. Similarly, 4 out of 10 American Adults “have no idea” […]

Read the full article →

How To Properly Examine Investment Contracts

Investments always come with risk. The subprime mortgage crisis in 2008 for example played a huge role in the recession that devastated many families across America and throughout the world. The Street notes how the crisis was brought about by loan companies taking advantage of vulnerable U.S. clients willing to invest in real estate. This […]

Read the full article →

Here’s What It’s Really Like to Be Rich

Most people want to be rich (however you define it). Many people have thought about what they’d do if they suddenly won the lottery or got a big inheritance or landed their high-paying dream job. It’d be exciting — for sure. Having plenty of money to save, spend and invest would certainly change your life. As you […]

Read the full article →

Highlights from LinkedIn’s Personal Finance Bloggers

For the past 10 years, I’ve been the administrator of the Personal Finance Bloggers group on LinkedIn — a group dedicated to sharing personal finance posts, tips for bloggers, and general financial news. It’s not something I’ve ever highlighted here — and that’s about to change. Starting this week, we’ll be sharing some of the […]

Read the full article →

Running Late on Payments? Here’s How to Catch Up

Paying off your debt is one of the most difficult — and important — pieces of achieving financial freedom. Until you are completely debt-free, someone else is going to own something that you think is yours. The number one way to pay off your debt is to automate your payments. Set it, forget it and […]

Read the full article →

3 Steps to Deal With a Pay Cut at Work

At the height of the Great Recession, I received word at my work that everyone in the company would be getting a 10% pay cut. It wasn’t fun. Senior management wasn’t happy that they needed to cut everyone’s salaries. Clearly, everyone who worked with me wasn’t happy either (though they were happy to still have a […]

Read the full article →

If Your Financial Plan Isn’t Working, Do This

Managing your money — and working toward a financial goal — is never as easy as it sounds. Even if you have a guide (like our 17 Days to Financial Freedom), there’s no guarantee that everything will go according to plan. You could lose your job. The stock market could crash, right before you’re about […]

Read the full article →

Here’s Why You Don’t Wait for a Recession to Start Investing

Buy low, sell high. It seems like sound logic, right? The cheaper you get something and the more expensive you sell something for, the more money you make. But it doesn’t work in investing quite like that. The theory does, of course — but not the execution of that theory.

Read the full article →

Making More Money When You Already Have A Full-Time Job

It can be tedious reading post after post listing ways to make extra cash that just never seem to work. From filling out surveys that won’t give you a payout for months, to taking on a second job that you just don’t have the time or flexibility for, it can be exhausting going from idea […]

Read the full article →

A Quick Guide To Paying Off Your Debt

We all try and live our lives without debt, but unfortunately it’s not something that all of us are quite as successful in avoiding as we might like to be. While payday loan lenders allow for short-term lending in the case of a financial emergency, understanding how best to go about paying off all debts […]

Read the full article →