Following the recent rise in commodity prices and emerging market, we have a feeling that some investors are starting to forget that investing is not a game and it is far from being easy. Investors in ETFs and funds exposed to these sectors are starting to brag about 25+% gains at dinner parties and find it hard to believe how some money managers are struggling in recent times.
At Enterprising Investor Forum, we believe that investment returns should be measures on long-term performance and that private investors should understand that 25+% gains are not ‘the norm’ and that are rarely sustained in the long-term; a real return of over 5% after inflation would be a great achievement! This return would mean that you are doubling your money every 15 years.
We recently came across a story about Winston Churchill that made us smile:
… In the 1930s, out of power and financially strapped, Churchill taught a lecture course at Cambridge on human sociology. One afternoon standing at the lectern and, always prone to the dramatic, he turned to the large class and demanded, “What part of the human body expands to 12 times the normal size when subjected to external stimulation?”
The class gasped. Churchill, obviously relishing the moment, pointed at a young woman in the tenth row. “What’s the answer?” he demanded.
The woman flushed and replied, “Well, obviously it’s the male sexual organ.”
“Wrong!” Said Churchill. ” Who knows the correct answer?
“Another woman raised he hand. “The right answer is that it’s the pupil of the human eye, which expands to twelve times its normal size when exposed to darkness.”
“Of course!” exclaimed Churchill, and he turned to the unfortunate first woman. “Young lady,” he said, “I have three things to say to you. First, you didn’t do the homework. Second, you have a dirty mind, and third, you are doomed to a life of excessive expectations.”
- Related Articles
- Related Q&A
- Financing Investment Properties Easily With Cheap Property Loans
- How to Finance Investment Property?
- Resources of financing investments for elevation of the role of commercial and investment banks
- Why You Should Finance Investment Property Via Debt
- How To Finance Investment Property
- Finance Investments, Tips On Where To Invest
- Small Business Finance: Investment for your Business
- Personal Finance - Investing in your Futurew
U.S.Stock Market Tips
By: narendra nainani | 16/11/2009Support for DOW is at 10000 and NASDAQ 2130 Trend Of Major Indices and Stocks
Indian Stock Market Tips
By: narendra nainani | 16/11/2009Nifty Call Option November 5000 was very active.Support for Sensex is at 16350. Resistance for Sensex
Quick Tips on Finding Hard Money Lenders
By: James Gossette | 16/11/2009For a real estate investor, one of his important tasks aside from finding good investment properties is to find a good source of funds.
Worst Mistakes When Rehabbing Houses
By: James Gossette | 16/11/2009Some of us get too excited with the concept of earning easy money through rehabbing houses.
Rehabbing Houses The Right Way
By: James Gossette | 16/11/2009Rehabbing houses is taking the real estate world by storm. Fixing and flipping houses is popular nowadays as a source of extra money.
Is it Wise to Hire Contractors when Rehabbing Houses?
By: James Gossette | 16/11/2009If you're looking for a breath of fresh air in your daily life, you should try rehabbing houses for profit. The business of fixing and flipping properties is relatively easy once you get the hang of it.
Fix and Flip These Homes
By: James Gossette | 16/11/2009Rehabbing houses has become a reprieve for those who are looking for an additional source of income amid the tough times.
Discovering Hard Money Loans
By: James Gossette | 16/11/2009Being a real estate investor, one of the most important things you should do is to find a good source of funds.
Book Review: the Little Book of Common Sense Investing, J. Bogle
By: Enterprising Investor Forum | 15/02/2008 | InvestingJohn Bogle summaries and explains a lot of our thinking here at Enterprising Investor Forum. He starts with Buffett’s famous story about the Gotrocks, explaining how Wall Street is effectively stealing investor funds and preventing them from adequately compounding good returns.
Black Friday Explained
By: Enterprising Investor Forum | 27/12/2007 | InvestingOK, granted, this might not be a very original post but quite a few people are still confused by this term and what it actually means.
Buying in Thirds
By: Enterprising Investor Forum | 27/12/2007 | InvestingAs we have written time and time again, the Enterprising Investor should take a long-term view to investing and profit from volatility. On way of dealing with this is by using an investing method know as ‘Buying in Thirds’. What does this mean?
Excessive Expectations
By: Enterprising Investor Forum | 21/11/2007 | InvestingFollowing the recent rise in commodity prices and emerging market, we have a feeling that some investors are starting to forget that investing is not a game and it is far from being easy. Investors in ETFs and funds exposed to these sectors are starting to brag about 25+% gains at dinner parties and find it hard to believe how some money managers are struggling in recent times.
How Many Stocks?
By: Enterprising Investor Forum | 04/10/2007 | InvestingInvestors often wonder how many stocks they should own and despite the fact that, we think, most people understand that just owning 1 or 2 stocks can be quite risky, we think that most investors would be surprised by the small number of holdings that are needed to provide significant diversification.
Following the Rate Cut
By: Enterprising Investor Forum | 02/10/2007 | InvestingThings are probably going to get worse before they get better. But where does this leave us today; is the US heading towards a recession?We are not sure that a recession is around the corner quite yet but there are some alarming signs that we are definitely going to see the economy slowing down.
Investing in Blue Gold
By: Enterprising Investor Forum | 02/10/2007 | InvestingWater demand keeps on increasing but what about supply? Despite the vast amounts of water present on the globe, fresh water only represent 3% of the total volume an and yet less than 1% of the planet’s water is drinkable. According to the UN, 20% of the world’s population does not have access to drinkable water and this figure keeps on rising. How should investors play this sector?