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Intelligent Investor Part 3

Ⓜ️ Hello. Every Sunday I publish excerpts from Benjamin Graham’s The Intelligent Investor.

⚡️ For the previous parts, see the hashtag #ReasonableInvestor at my telegram channel.

After reading the first edition of The Intelligent Investor in 1950, the young American entrepreneur Warren Buffett realized that this work by Benjamin Graham was the best that was ever written about investment. Years later, having become one of the largest investors in the world with a fortune of $ 66 billion, Buffett has not changed his mind.

The principles of passive investment policy, alternative to self-compilation of the portfolio.

🔸 The following principles save the investor from the complexities of selecting assets for his portfolio. By following these principles, the passive investor spends less emotional energy and time tracking the market.

  • ✅ Instead of compiling a portfolio yourself, you can purchase units of an investment fund (ETF). For a portfolio of stocks and bonds, it is enough to purchase shares of only 2 exchange-traded funds (ETFs).
  • ✅ An investor can transfer his funds to the management of an investment company that professionally manages investments under certain conditions. Such conditions can be considered the minimum amount transferred to the investment company for management, as well as the cost of the company’s services for the fact that it professionally manages your investments.
  • ✅ The investor can use the method of averaged equal investment. With this strategy, the investor has to buy stocks and bonds for an equal amount on a monthly or quarterly basis. That is, with a fall in the value of assets, he will buy more assets, and with an increase in their value, less. As a result, the price of the assets included in its portfolio will be balanced. This method is a special case of using a broader approach – “formula investing”.


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