For some people, money is everything. They are great at tracking their spending, know their net worth, and always get the best prices when they shop. These people are great at managing their money, and don’t waste a dime.
Then, there are other people who are great at managing their time. They are always finding ways to get more things done faster. They never waste time sitting in traffic, and make sure their meetings are quick and productive. These people understand how valuable their time is.
What could be more valuable than our time?
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Investing, Money, Success
effort, energy, financial future, Investing, Money, Success, time
Index funds have become more and more popular over the last 15 years. The internet has made people aware of the high costs of mutual funds, and they were looking for a better solution. It’s true that index funds are probably better than mutual funds. But do they have drawbacks as well?
One of the major challenges with index funds is that they (obviously) go down with the market. People understand this when they invest, but they don’t really get it until they see their retirement account drop by 50%. What no one tells them is that sooner or later their account will drop by a large amount. It’s difficult to prepare ourselves psychologically for something like this, when we have no experience in the past.
Automated Trading systems do not need to go up and down with the market. They can exit or short a stock or index at any time. So, while the market goes down an Automated Trading system can actually make money. In fact, since markets go down faster than they go up, Automated Trading systems can make more money faster when the market is going down.
One of the good things about index funds is that once you make an investment, you don’t need to spend a lot of time or effort managing it. Index funds are perhaps one the most “Set it and forget it!” investments available. Automated Trading is similar in that it does not take a lot of work to manage the account. But you do need to check it periodically (if not daily) to make sure it is working properly.
Index funds definitely have their advantages. And, so do Automated Trading systems. It will be interesting to see how the investment landscape changes over the next few years.
Automated Trading, Investing, Money
Automated Trading, effort, index funds, Investing, Money, retirement, time
is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
