Nerdy Deep Dives: Investing, Part 3

With various companies vying to manage investors’ money, investing can feel overwhelming. John Bogle, however, argues that the winning strategy for novice investors is simple: Invest in traditional index funds and hold them indefinitely.

In his 2017 book, The Little Book of Common Sense Investing, Bogle outlines the reasons why investors typically make more money with index funds than the primary alternative—actively managed mutual funds. Because the costs of mutual funds vastly outstrip those of index funds, Bogle argues that mutual funds deliver reduced returns, and those relative losses compound over time.

In this guide, we’ll discuss Bogle’s arguments about the superiority of index funds over mutual funds, in addition to his proposed allocation of stocks to bonds in your portfolio. We’ll also dig deeper into the data that underlie Bogle’s arguments and examine how the book’s predictions have panned out since its publication.

A massive bestseller now in its 12th edition, Burton Malkiel’s A Random Walk Down Wall Street provides a comprehensive and entertaining introduction to the world of finance. Malkiel leverages his experience as an academic economist and former Wall Street portfolio manager to explain for the lay reader the intricacies of security analysis, asset valuation, and investment theory. He also offers a wealth of practical investment principles that will be useful for novice and seasoned investors alike.

In The Simple Path to Wealth, blogger and financial expert JL Collins offers a simple road map to achieving financial independence and a secure retirement: Spend less than you make, avoid debt, save “F-You Money,” and invest in stock index funds. He demystifies stocks and bonds, as well as a plethora of investment plan options. In addition to explaining basic concepts such as asset allocation, Collins answers key questions such as how to live on your investments and how to avoid major tax hits.

Whether you’re in the wealth accumulation stage of life where you’re growing your investments, or in the wealth preservation stage where you’re living on them, Collins tells you how to use your money to achieve freedom and a more fulfilling life.

The world’s greatest investor Warren Buffett read this book when he was 19 years old, and he still calls this “by far the best book about investing ever written.” The Intelligent Investor covers timeless ideas of how the market behaves, how investment is different from speculation, and how to identify profitable investments.

Learn whether you’re a defensive or an aggressive investor, why most trading strategies don’t work, and how to maintain control of your psychology in any type of market condition.

Are you struggling to achieve consistent success as a financial trader? Trading consultant Mark Douglas says you don’t need more knowledge or better advice to improve. He claims one factor distinguishes successful traders: a winning mindset. In Trading in the Zone, Douglas explains that when trading, we often mistakenly embody a fear-based mindset instead and avoid risk. Therefore, no matter how much time we spend studying the market, we’ll fail to establish a pattern of winning. To achieve consistent success, we need to train ourselves to think differently and embody the winning mindset, and Douglas tells us how.

In this guide, we’ll present the mental barriers that Douglas says we need to overcome and the core beliefs we need to internalize to trade successfully. We’ll also examine research in psychology, biology, and finance that explores these concepts. Along the way, you’ll learn practical steps to reduce interference from negative thoughts so you can start accumulating wins (and profits).

Cryptocurrencies’ popularity in the US spiked in 2021 but was grounded almost as quickly the following year, when lead cryptocurrency exchange FTX collapsed. Since then the crypto industry has continued to unravel, leading many to ask whether it’s on its last legs.

Bitcoin surged again in August, thrusting cryptocurrencies into the spotlight once more. The industry is large enough now that major investors take it seriously. Even a nation, El Savador, is adopting Bitcoin as its national currency. But before it becomes truly mainstream, it’ll need to address some basic problems, like criminality and susceptibility to cyberattacks.

The cryptocurrency industry has been marked by volatility, bankruptcies, and scandals, and after the recent implosion of crypto exchange FTX, many are calling for long-overdue regulation. Regulators face challenges writing laws for the industry, though, as no one can agree on some fundamental aspects of it: Is crypto a currency, a commodity, or a security? And how do you regulate a decentralized global industry where no one is in charge?