“The investment business is a giant scam.  Most people think they can find managers who can outperform, but most people are wrong.  I will say that 85 percent to 90 percent of managers fail to match their benchmarks.  Because managers have fees and incur transaction costs, you know that in the aggregate they are deleting value.  Most people should simply have index funds to keep their fees low and their tax down. No doubt about it”  

 -Jack R. Meyer, former chief of Harvard Management Company

“Husbanding That $27 Billion,” Business Week, Dec 27, 2004

What CANNOT be controlled in investing?

• - Investment outcomes – Performance is always unknown!
• - World Events- Volcano in Europe
• - Weather – Hurricane Katrina
• - Lawsuits - Johnson and Johnson and a lot of others
• - Changes in government regulations and taxes – New finance regulations  and Healthcare = taxes

 "Speculation is an effort, probably unsuccessful, to turn a little money into a lot. Investment is an effort, which should be successful, to prevent a lot of money from becoming a little."

  -Fred Schwed, Jr.

            "Where Are The Customers’ Yachts?", 1940

“There is no other proposition in economics that has more solid empirical evidence supporting it than the Efficient Market Hypothesis…In the literature of finance, accounting, and the economics of uncertainty, the EMH is accepted as a fact of life.”

                -Michael C. Jensen

                “Some Anomalous Evidence Regarding Market Efficiency,” Journal of Financial Economics, 1978

What CAN be controlled in investing?

• - Asset Allocation/Diversification
• - Costs
• - Rebalancing Strategy
• - Risk
• - Reaction to Emotions