Why 'Dead' Investors Crush the Living

Listen up, folks! We're diving into a phenomenon that's as surprising as it is true: 'dead' investors often outperform the living. Yes, you heard it right! The strategies employed by those who have passed on are leaving the rest of us in the dust. Let's break it down and see what we can learn from these investment ghosts.

First off, let's talk about the long-term, buy-and-hold strategy. These 'dead' investors didn't mess around with day trading or trying to time the market. They bought and held, letting their investments grow over decades. As David Tenerelli, a certified financial planner, puts it, "For most people in most situations, a long-term, buy-and-hold, diversified, low-cost investment approach is likely more suitable than active trading." This strategy helps you ignore the 'noise' and focus on the long game.

Next up, index funds and ETFs. These 'dead' investors weren't picking individual stocks; they were buying the market. Index funds and ETFs provide broad market exposure at a low cost. As Alyson Basso, managing principal of Hayden Wealth Management, says, "Sticking with index funds or exchange-traded funds (ETFs) that mirror the market is often the best path for a newer investor." This approach reduces risk and can lead to more stable returns over time.

Now, let's talk about emotional decision-making. Living investors often make impulsive decisions based on market volatility or personal biases. But 'dead' investors? Their portfolios are managed by trustees or beneficiaries who aren't swayed by emotions. This disciplined approach can result in better investment outcomes.

And finally, diversification. 'Dead' investors' portfolios are often spread across different types of investments. As investment experts recommend, "spreading money across different types of investments (diversification) rather than putting everything into one category." This ensures that the portfolio isn't overly exposed to any single asset class, reducing the impact of market downturns.

So, what can we learn from these 'dead' investors? A lot! They teach us the importance of a long-term perspective, the value of index funds and ETFs, the dangers of emotional decision-making, and the necessity of diversification. By adopting these strategies, you too can outperform the living and become an investment ghost yourself!



So, are you ready to become a 'dead' investor? Start by adopting a long-term, buy-and-hold strategy. Diversify your portfolio across different types of investments. Use index funds and ETFs to reduce risk. And most importantly, keep your emotions in check. By following these strategies, you too can outperform the living and become an investment ghost yourself!