I Don’t Know And I Don’t Care

I wrote another article published at Physician’s Money Digest on one of my favorite investing phrases- “I Don’t Know And I Don’t Care” about how sometimes being agnostic about the future can lead to successful investing strategies.  Check it out!

I’m often asked what I think the market is going to do in the next month, quarter, year or even decade. I usually reply, “I don’t know and I don’t care.”

While that’s not entirely true — because I do care at least a little what happens to my investments over the next 10 years — I certainly don’t know what will happen to them. I learned very early in my investment career that I have no idea what the stock market, interest rates or exchange rates were going to do in the future. It also became very clear to me that experts, analysts, economists and even “gurus” also had no idea. In many cases their guesses were worse than flipping a coin or, to borrow a phrase from Burton Malkiel, worse than having a monkey throw darts at the stock page of The Wall Street Journal.

I needed an investment strategy that didn’t require me to have a working crystal ball to be successful. Click here to read the rest!

What did you think?  Do you use index funds and/or a fixed asset allocation?  How has that strategy affected your returns and your life?  Comment below!

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Comments

I Don’t Know And I Don’t Care — 4 Comments

  1. It took a while, but I am glad I went to index funds. I even go simpler than you mention by using the TSP Target Retirement and Vanguard Lifecycle funds. $1916.67 is taken out each month and split between them to maximize my annual contributions and I don’t even have to worry about doing the rebalancing. It is had definitely simplified my investing and relieved much of the stress/burden. It is pretty awesome that it also tends to perform better in the long run as well.

  2. A great reminder to stay the course. I know many people got anxious yesterday but I took the opportunity to buy more total stock index. I really wish the medical schools will have a short course about the basics of financial planning. Not the ones given by the insurance/investment salespeople but unbiased lectures. Thanks for doing a great job educating your fellow doctors about investing

  3. Excellent summation of what you’ve been advocating for awhile. Thanks; I’ve signed my kids up for your newsletter, as well, and when one of your ‘jewels’ comes along, I forward it, as well. I’d say the comment about an ‘unbiased lecturer’ would be great – we had none of that in medschool, nor did we receive any education in business/the business of running a practice. I have to wonder if that’s purposeful?

  4. I agree whole heartedly. I started investing when I was 10 y/o. During college, due to my brilliance and great stock picking abilities I had great returns during the dot-com bubble, but then I became an idiot over night when I lost it all when the bubble popped. Around the same time I had a professor (I majored in Finance despite my plans for medical school) who was a mutual fund manager. He convinced me of indexing. He was quite convincing with his reasoning (think Bogle), but especially given that his career was based on convincing people that he could beat the market as a mutual fund manager, but yet he still preached indexing (I often wondered how he felt morally about his job if he didn’t really believe he could beat the market). I currently have a friend in California who manages a $6 billion dollar fund who also thinks indexing is the way to go–again despite his career being based on his “ability” to beat the market. Interestingly, he has beaten the market for 4 straight years, yet he still believes indexing is the best way to go.

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