Thanks for the replies.
Just a note, the strategies/ideas in this book are nothing new of course, but what I liked about the book was just the way the information was presented as it helped me look at shares from a slightly different perspective, and better see its application to my own personal investment strategy.
At the end of the day, the MOST important message i can impart on people, is that investing in shares is very similar to investing in
businesses.
In todays world there is too much removal of ownership of businesses (and that is all that a shareholder is)
Reading this book didn't give me any inclination to stock pick whatsoever, as this is beyond my skill set, and I understand and accept this. I have no intention at all of reading annual reports or analysing stock price trends!
there is no 'shame' in this at all. The key in long term investing is to know ones strengths and weaknesses. There are many 'smarter' property members on this forum than me. My knowledge of opportunity in property is quite limited, but this doesnt inhibit me from making great gains in property, why?
because i just wait for the right opportunity in my limited sephere of knowlege (my returns on property have exceeded my returns on the stock market, but maybe that was just due to a limited window of opportunity in my area of limited property knowledge)
But the book has reminded me of the logic of investing in shares for the long-term for growth, and more importantly, for a long-term dividend income stream, that rises at a greater rate than bank interest or rents.
Over the very long term, shares should outperform because they are the most risky, its basic risk vs return. This has been supported by the 'long term' statistics. But long term here can really mean long term, there was a recent comparison of shares vs bonds which showed that for the first time in over 20 years, bonds outperformed shares (however this just means to me that shares over the
NEXT 20 years have a greater propability of outerforming, ie regression to the mean).
Dollar cost-averaging into an index fund portfolio, which as you correctly point out, was my ''original thought''! - is exactly what this book has given me greater conviction to follow through with, that's all.
the key to dollar cost averaging in an indexfund is to maintain it regardless of timing.
Someone might out there might want to do a statistical analysis of the Japanese market with dollar averaging.
It could be quite useful to this forum.
The Japanese share market has been in a secular
BEAR market for the last
40 odd years.
Has dollar consistent dollar averaging produced an 'ok' result.
Winston Wolfe, maybe you can add to this.
Yesterday I actually sent an e-mail to Peter Thornhill to see what his thoughts on the index fund approach were and whether his portfolio has actually outperformed it!
If you are looking at this you really need as much of a 'long term' as possible.
this is really the playground of the funds management industry marketing material (however conveniently they dont have to report 'after tax' effect, another benefit of index funds in my opinon)