Sound Investing The Importance of Keeping Investing Simple!
Dec 24, 2025
Discover the art of lifelong investing as Paul emphasizes the importance of simplicity over complexity. He shares insights on the critical decisions every investor faces, such as investing in individual stocks versus bonds or diversifying across various markets. Real-life experiences reveal the risks of concentrating investments, while a simple portfolio can potentially add consistent returns. Join the conversation about balancing fun and discipline in investing while avoiding the pitfalls of speculation, especially with trends like crypto and AI.
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Choose Stocks Or Bonds As Your First Decision
- Decide first whether your savings belong in stocks or bonds and build from that core choice.
- Use broad, diversified funds instead of betting on single companies to reduce catastrophic risk.
Diversification Lowers Ruin Risk
- Broadly diversified equity portfolios historically compound near 10% annually over long periods.
- Diversification across thousands of companies prevents going broke despite severe market drops.
Small Private Bets: Three Failures, One Big Win
- Paul Merriman invested in four startups and three returned nothing while one unexpectedly became worth millions.
- That lucky win illustrates the skewed payoff of private bets compared with diversified public ownership.