Investment Principal #3: Using Passive/Index Funds or ETFs
Index-based or passive asset class funds focus on how to reduce the costs and frictions involved in capturing the market’s generous expected returns over time.
Investment Principal #2: Diversify Your Asset Classes
The magic behind diversification is found in a financial measure known as correlation, or the degree to which two asset classes move in similar patterns.
Investment Principal #1: Invest in Asset Classes
Evidence suggests your portfolio’s asset class mix has a much larger impact on its variation of returns, compared to stock-picking and/or market-timing techniques.
From Indexing to Evidence-Based Investing
To appreciate evidence-based investing, it helps to look at its historical roots, planted more than a half-century ago, and incorporated into its early solutions: index and passive asset-class investment strategies.
Winning with Evidence-Based Investing
How do you ensure your best financial interests are the top priority when you invest? One way is to use evidence-based investing instead of traditional active investing