Ignore the Hype

Introduction

The philosopher George Santayana once said, “Those who cannot remember the past are condemned to repeat it.”

The century of financial history we have to work with has provided you with a treasure trove of lessons. These lessons tell you what works and, just as importantly, what doesn't work. Both lessons are equally valuable.

In investing, little things make a big difference. And as you'll learn from this book, financial success for most people isn't about that once-in-a-lifetime coup. Instead, the key to financial freedom is to find a disciplined, repeatable process, based upon empirical research and the historical record. Then, you must have the intestinal fortitude to stick with that process through good times and bad.

And therein lies the Great Challenge. In a world of constant change, how do you stay the course? How do you ignore the hype about the next great investment? When times get tough, how do you know if you should hold steady to the path you're on or change and adapt your approach?

The reality is that in attempting to navigate your way toward financial freedom, there are two things you must get right.

First, you must identify and implement an approach that will work for you. Ideally that approach will be based upon empirical research and the experience of others. Most importantly, that approach must fit well with your personal goals, constraints, time horizon, and risk tolerance.

Once you've identified your approach, the second thing you must do is ...