Maggie's Farm

We have mentioned many times here that actively-managed investment funds and accounts, after fees, perform worse than index funds.

Fund managers naturally hate that fact, as do investors for whom hope often conquers experience. You cannot dispute the facts: Active Fund Management Is A Loser's Game.

Despite the data, I often think that people want to know that there is a sober person behind the wheel, somebody you can phone when you want to. Somebody who cares. Somebody who is smarter than the markets. They pay for that fantasy.

How to protect your nest egg in the Land of ZIRP? Don't ask me. I bank 10% of my pre-tax income each year, religiously. My nest egg, paltry as it is, is 1/4 equity index funds, 1/4 bond index funds, 1/4 cash, and 1/4 in one really good hedge fund. It may all blow up someday, but I intend to never need the money anyway. The men in my family never quit working and I will keep that wholesome, old-fashioned tradition going unless or until disease or the grim reaper get me.

Retirement ages people, or most people. It ages them, mentally.

I think it is an old New Englander ethic: be stingy, save, resist temptations to buy stuff, and work forever. Use money for overpriced education, books, booze, theater, adventure, and travel.