Thursday, January 5, 2012

Now What

Now that we have entered the new year, there are a plethora of articles about what to do with your money and investments for 2012.  Most of these articles are not worth reading.  First of all, there is no reason to make investment decisions just because the calendar has changed from December to January.  The world is just as volatile and unpredictable as always.  Second of all, most predictions are wrong.  Investing should be about appropriate asset allocation and long-term thinking, not predictions about "what looks good for 2012".

All of that said, today I read an article entitled "Where to Put Your Money in 2012" written by Burton Malkiel, a Princeton economist whom I have referenced beforeThe article is well worth reading, not because of any predictions, but because Professor Malkiel does a great job of providing wise perspective about long-term investing.  Here is a  quote:
"Whatever the specific mix of assets in your portfolio at the start of 2012, you would do well to follow one crucial piece of advice. Control the thing you can control—minimize investment costs. That is especially important in a low-return environment. Make low-cost index mutual funds or ETFs the core of your portfolio and ensure that any actively-managed investment funds you purchase are low-expense as well."