What is the Value Indexer blog?
This blog is about the evolution of my personal investment strategy. Following many great investors, I hope that sharing my perspective will be helpful to others and allow me to understand it better, as well as see contrasting views and facts that I missed. In the end there are few hard facts and a lot of opinions that can’t be proven until they don’t make a difference, so I welcome all views!
This blog is about what I’m thinking and doing and why, along with anything that might be of interest to those who share my views. I may make a few mistakes along the way, but one of my measures of success will be to largely avoid lagging common indexes over a period of several years. I expect that at some times I’ll be behind for a year or two but if my rational decisions do worse than a simpler approach for no good reason, they aren’t rational in the end.
This blog is not about
- Beating the market
- Excessive investment returns in general
- Simple formulas
- “Guaranteed” success
- Market timing
- Economic cycle timing
- Detailed security analysis
Although my approach is no grand strategy I chose the name “Value Indexing” for this blog because it represents the key elements that I focus on. I prefer index funds like many other self-taught investors because they provide easy stability and diversification, and avoid the risk of underperforming with a high-fee active fund. However I pay close attention to the allocation between indexes. Other investors will go as far as indexing their allocation to the relative size of various markets in the world but I believe that can be a big mistake.
Like value investors I’m sensitive to price and the actual return the investment is earning. Although I said above that this isn’t about fixed rules and formulas, judging investments based on what they actually earn is a bit of a fixed rule. I don’t care what anyone else says – a long-term investment that’s earning 0.5% is just too expensive for me and not worth it. On the other hand if someone will sell me a safe government bond that will pay me a 10% real yield I would be happy to free them from the burden of owning that!
The results that I hope to get are more stable and consistent returns, with some potential for small outperformance at times from avoiding a few common emotional mistakes or even acting on the other side of them to make a profit. I won’t know if I’m right until it’s too late to do anything about it, but at least I can be confident along the way that I’m not exposed to some of the bigger downsides of the market.
Who might be interested in this? Anyone can do what I’m doing, but it’s not a simple approach. I believe it takes some interest in finance and economics, and it helps to have the mindset that lets you see through the current popular view of the market, whatever that is.
I hope some of my writing will be informative and enlightening to you, and that you’ll let me know what you think – particularly if you disagree!