The Discipline of Investing

As with most everything in life, look for balance

What’s the best way to construct a portfolio? My view is that the approach that works best for most people, most of the time, is using index funds.

But does that mean you should never deviate from that? If you want to buy an individual stock or invest in a friend’s startup, is that a sin? In short, no.

I sometimes make the analogy to eating habits. Most people can be disciplined most of the time. But if you go to an extreme and try to eat just salad and vegetables at every meal, you’ll eventually go crazy and fall off the wagon in search of french fries or some other junk food.

It’s the same with investing. I like sticking to mostly boring index funds, but if you want to do something a little more interesting every once in a while, I don’t think that’s so bad. And it may allow you to stay more balanced overall.