Your Best Investment Move Ever

I think one of the huge problems investors face these days is knowing what information to trust and what information should be ignored. Do we trust prestigious newspapers like the Wall Street Journal or the New York Times? How about the Wall Street banks? They presumably have the most resources and, hence, the best information right? How about a friend or family member who insists he knows the next hot investment? Paul Merriman wrote a great article about just this topic called "Your Best Investment Move Ever." Unfortunately, the "right" investment source is probably one that is hardly ever in the news. That in itself is a mistake. Check out the article though. It's a quick read and has tons of good information in it. A few quick pieces from the article:

"Every investor can choose among three basic sources: Wall Street, the huge industry that's perpetually hungry for profits; friends, neighbors, relatives and others who are eager to show how smart they are; and the academic community, which rigorously studies what works — and what doesn't.

I call this choice Wall Street vs. Main Street vs. University Street. My pick is University Street and I've never regretted it."

And then a little bit later...

"You see, it was the academic community that taught me decades ago to add asset classes with long-term performance records higher than the S&P 500 Index, without additional risk.

All I did was apply the lessons. Perhaps the greatest of these was that proper asset allocation accounts for the overwhelming majority of the results of a portfolio."

I always made a point to largely ignore most of what i hear on TV or read in newspapers about investing. Most of the information I use comes from books written by trusted scholars. Below are a list of books I would recommend reading:

The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Return by John Bogle (side note: I recommend anything that John Bogle writes)

A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing by Burton Malkiel

The Elements of Investing: Easy Lessons for Every Investor by Burton Malkiel and Charles Ellis

The Power of Passive Investing: More Wealth with Less Work by Richard Ferri

And if you are feeling ambitious...

John Bogle on Investing: The First 50 Years by John Bogle

Enjoy!

(Paul Merriman's bio on Marketwatch reads: "Paul Merriman is committed to educating people of all ages to get the most from their retirement investments. Founder of Merriman Wealth Management, a Seattle-based investment advisory firm, he is the author of numerous books on investing: "Financial Fitness Forever," "Live It Up Without Outliving Your Money," and the new "How To Invest" series, free at his website:  "How To Invest" series: "First Time Investor," "Get Smart or Get Screwed: How to Select the Best and Get the Most from Your Financial Advisor" and "101 Investment Decisions Guaranteed to Change Your Financial Future." In his retirement, Paul writes a weekly column at MarketWatch and continues his weekly podcast, Sound Investing, which was recognized by Money magazine as "the best Money Podcast in 2008". He is president of The Merriman Financial Education Foundation and all profits from the sale of his books are used to advance financial literacy. His recommendations for portfolios of Vanguard funds, Fidelity funds and ETFs, podcasts, articles and books are available at paulmerriman.com. Follow Paul on Twitter @SavvyInvestorPM")