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| Excerpts from: College Savings Rx: Investment Prescriptions for a Healthy College Fund 3rd Edition An Introduction to Investing Simplify, Simplify Henry Thoreau was not known as a great investor, but he was an excellent source of wisdom, and in his words, "our life is frittered by detail...simplify, simplify," is good guidance for college investing...or any investing, for that matter. There are hundreds, if not thousands, of books, magazines, newspaper articles, television and radio programs, newsletters and CD ROM's telling you what to do with your money. Some are very dogmatic, and suggest that if you do not do exactly as instructed you are doomed to failure. Most, however, are "gentle" in their guidance, and the good news is that most of the advice is acceptable to good. What is difficult, however, is there is so much of it, and after awhile you just want a deep booming voice to come down from on high and tell you what to do. Sadly, that is not likely to happen...except in the movies. Buy Good Stuff and Leave it Alone Investing, whether for college or any long-term goal, is successful when it follows the fundamental secret. Buy good stuff and leave it alone. The corollary to the great secret is that investing is essentially boring. No one will crowd around you to hear you describe your mutual fund that has been growing steadily over the years. We all love to hear about the hot stock that doubled; overnight, but isn't it interesting that no one wants to tell the story about the stock that collapsed in the same time period. So, in addition to remembering the great "secret," keep in mind the words of renowned investor Warren Buffet who defined the two rules of investing:
By the time this book goes to press, the stock market may have gone higher...or substantially lower. Whichever it is, history is still a great teacher. One thing we know for certain is the stock market will always rise over time. But not every day. One of the great old investment sayings is "Don't confuse a bull market with brains." No one should be branded a genius for making money when the market goes up, nor denounced as a fool for losing money when the market goes down. If you can resist the temptation to blindly jump into investing because everyone else is racking up the profits, and follow the basic rules, you will be just fine.
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