Thanks to an invite from Canadian Capitalist, I had the pleasure of hanging out with accomplished and respected Canadian bloggers Michael James, Larry MacDonald and Canadian Capitalist (Ram Balakrishnan) listening to Larry Swedroe speak earlier this week, discussing the numerous merits of passive investing.
For those who don’t know much about Larry, he is the Principal and Director of Research for Buckingham Asset Management. Larry is also an accomplished author who has published 11 investment books, has appeared numerous times on CNBC and runs a popular blog called Wise Investing. His most recent book, The Quest for Alpha is now available and I have a copy.
When it comes to passive investing or investing in general, Larry knows his stuff. So, when I had the opportunity to hear Larry speak on Monday night, I jumped at the chance.
During Larry’s 75-minute presentation in Ottawa, hosted by the fine folks at PWL Capital Inc., I took a few notes. Here are some of my takeaways from that event.
Larry on types of investors:
Investors fall into two basic categories: active investors or passive investors. Active investors believe in trying to time the market and pick winning stocks. Passive investors believe in capturing the returns markets provide and do so in a low-cost, tax-efficient manner. Larry strongly believes, based on overwhelming amounts of evidence, data and his own research that most individual investors are far better off using passive investing versus active investing. He gave an example of a Mensa investing club who underperformed the stock market by almost 13% per year for 15 years.
Could you do better than a Mensa club? No way I could.