Our preferred fund manager, Dimensional Fund Advisors, has a short and valuable set of slides on how you can maximize success in investing. There are no guarantees, but these slides describe the best approach we have seen. The summary:
- Accept the market's pricing. It represents the collective view of trillions of dollars.
- Don't try to out-guess the market.
- Don't "chase" recent trends. There is no evidence they will hold in the future.
- Take advantage of the market. It has produced attractive returns over the past 100 years.
- Use academic research to understand how to invest.
- Diversify broadly.
- Don't try to time the market.
- Manage your emotions.
- Ignore the media.
- Focus on what you can control. That includes risk, fees and tax.
You can find the slides at Dimensional's website, here.