Passive investing makes 'investing' in the stock market essentially a ridiculous idea, considering you are making a very long term gamble without you being able to control any variable whatsoever.
I agree in principle it's counter intuitive but the evidence is overwhelming. You can control MANY variables - asset allocation, diversification, fees paid, tilt, tax paid, savings rate, your own behaviour. Buy you're right NO ONE can control the stock market and NO ONE can predict the future of the stock market reliably. Once you accept that buying a small share of the best companies in the world and letting capitalism do its thing for 20 years becomes the least "ridiculous" idea. In investing, as in medicine it's important to follow the evidence and not make random, ridiculous, gambles. Check out the SPIVA scorecard to see how a passive investing strategy performs against highly paid (paid using your potential investment returns) but ultimately underperforming investment managers. The active investment industry needs to sell you on the idea that they can control variables/predict the future and charge you £££ fees and they need to ridicule the idea that a low cost passive strategy could ever outperform their "star" fund managers. Sounds like you've been sold?
@@MedicsMoney I agree 'trading' is a fools game (and paying someone to do it is even worse). Passive investing in an ETF etc. is the best outcome when dealing with stock exchanges. However my main point is that investing on a centralised exchange is inherently foolish if it weren't for the market surrounding it pushed by governments like you say and popularised by Buffett, Graham etc. primarily from the US. I know the rebuttal to this is if the average of all the stock market fails, so will FIAT and we'll be eating shit for breakfast lunch and dinner in a real life version of a Cormac McCarthy novel. However surely because it is protected from the worst does not make it the least risky considering the opportunity cost and also considering the underlying companies are growing increasingly automated and easily replicated by the virtue of ease of scale with digital only companies. Investing in a company that you know, understand and trust the fundamentals of has shown to produce greater returns (nice if it's in your local area also to drive to shareholder meetings). Being able to share your views with the directors and change the company to me seems the way to go (however this is so situation specific it is hard to go into any real detail). To me investing in an ETF etc. is just long term grown up gambling (which I know you would strongly disagree with not least because everything is a gamble philosophically speaking). I have a close friend who has followed NFL (American football) for years knows all the players, teams, rules etc. spreadsheets the whole nine yards, every season he places 5 bets at very low odds but high stakes that he has a very high 'certainty' in. He has showed me his returns for the past 12 years and they average close to 20% of his pension pot (tax free, not sure how that works, re. professional gambling). Apart form the zero sum nature, I see investing in the stock market passively just as crazy however over a long time period. Similar to the fascinating episode with Dr. Abdullah Albeyatti there are obviously different personalities and risk tolerances and we don't have to agree, but appreciate the video, context and I suppose given that this is targeted to a wide audience sensible advice.
When I heard you mentioning my name I jumped! 😂 Just a clarification, I'd never suggest waiting to invest or trying to time the market. That would be just silly. I was just saying that making 15% last year was a tragedy for anyone with a long term horizon and regualr investing strategy (no lump sum). Minus 15% would have been so much better for my future. I do feel this is important to understand. Thanks again for quoting me!😊
Thanks for your input - Medics' Money has always been about these respectful debates and sharing of opinions between doctors. Come on the podcast for an episode and I feel we'd have a great discussion? Your point is excellent and it's a source of constant frustration to me that when the shoe shop has a 20% off sale - there is a queue of people wanting to buy. When the stock market drops 20% instead of buying more in the "sale" the data shows most DIY investors don't continue to buy more and may even sell, which historically speaking has been a massive and expensive error. Not advice 🤑
Have you ever thought about doing a video about ethical investing? It is much more difficult deciding where to invest compared to investing in a standard index-tracker.
Great video. Clear and straightforward. One request, please could you either drop the music or turn the volume down on future videos. It is irritating, especially when it is in competition with the talk. Thanks.
Passive investing makes 'investing' in the stock market essentially a ridiculous idea, considering you are making a very long term gamble without you being able to control any variable whatsoever.
I agree in principle it's counter intuitive but the evidence is overwhelming.
You can control MANY variables - asset allocation, diversification, fees paid, tilt, tax paid, savings rate, your own behaviour.
Buy you're right NO ONE can control the stock market and NO ONE can predict the future of the stock market reliably. Once you accept that buying a small share of the best companies in the world and letting capitalism do its thing for 20 years becomes the least "ridiculous" idea.
In investing, as in medicine it's important to follow the evidence and not make random, ridiculous, gambles.
Check out the SPIVA scorecard to see how a passive investing strategy performs against highly paid (paid using your potential investment returns) but ultimately underperforming investment managers.
The active investment industry needs to sell you on the idea that they can control variables/predict the future and charge you £££ fees and they need to ridicule the idea that a low cost passive strategy could ever outperform their "star" fund managers.
Sounds like you've been sold?
@@MedicsMoney I agree 'trading' is a fools game (and paying someone to do it is even worse). Passive investing in an ETF etc. is the best outcome when dealing with stock exchanges. However my main point is that investing on a centralised exchange is inherently foolish if it weren't for the market surrounding it pushed by governments like you say and popularised by Buffett, Graham etc. primarily from the US.
I know the rebuttal to this is if the average of all the stock market fails, so will FIAT and we'll be eating shit for breakfast lunch and dinner in a real life version of a Cormac McCarthy novel. However surely because it is protected from the worst does not make it the least risky considering the opportunity cost and also considering the underlying companies are growing increasingly automated and easily replicated by the virtue of ease of scale with digital only companies.
Investing in a company that you know, understand and trust the fundamentals of has shown to produce greater returns (nice if it's in your local area also to drive to shareholder meetings). Being able to share your views with the directors and change the company to me seems the way to go (however this is so situation specific it is hard to go into any real detail).
To me investing in an ETF etc. is just long term grown up gambling (which I know you would strongly disagree with not least because everything is a gamble philosophically speaking).
I have a close friend who has followed NFL (American football) for years knows all the players, teams, rules etc. spreadsheets the whole nine yards, every season he places 5 bets at very low odds but high stakes that he has a very high 'certainty' in. He has showed me his returns for the past 12 years and they average close to 20% of his pension pot (tax free, not sure how that works, re. professional gambling). Apart form the zero sum nature, I see investing in the stock market passively just as crazy however over a long time period.
Similar to the fascinating episode with Dr. Abdullah Albeyatti there are obviously different personalities and risk tolerances and we don't have to agree, but appreciate the video, context and I suppose given that this is targeted to a wide audience sensible advice.
When I heard you mentioning my name I jumped! 😂
Just a clarification, I'd never suggest waiting to invest or trying to time the market. That would be just silly. I was just saying that making 15% last year was a tragedy for anyone with a long term horizon and regualr investing strategy (no lump sum). Minus 15% would have been so much better for my future.
I do feel this is important to understand.
Thanks again for quoting me!😊
Thanks for your input - Medics' Money has always been about these respectful debates and sharing of opinions between doctors.
Come on the podcast for an episode and I feel we'd have a great discussion? Your point is excellent and it's a source of constant frustration to me that when the shoe shop has a 20% off sale - there is a queue of people wanting to buy.
When the stock market drops 20% instead of buying more in the "sale" the data shows most DIY investors don't continue to buy more and may even sell, which historically speaking has been a massive and expensive error. Not advice 🤑
@@MedicsMoney I would absolutely love to come to the podcast. 😊
Let’s do it www.medicsmoney.co.uk/contact/
Invest now and hold the bags for lifetime
Hi guys many thanks for all your advices. Could you please look into a holding company pros and cons?
Have you ever thought about doing a video about ethical investing? It is much more difficult deciding where to invest compared to investing in a standard index-tracker.
Ethical investing was one of the first podcasts we did. Episode 9 Hope it helps.
Great video. Clear and straightforward. One request, please could you either drop the music or turn the volume down on future videos. It is irritating, especially when it is in competition with the talk. Thanks.
Thanks, will do!
Which platform for investing you use?
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