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With the stock market experiencing a steep decline of late, many investors are questioning how best to invest in this asset class for the long term.

There are three ways to invest in the stock market.

1. Select individual stocks yourself.
2. Hire a professional stock picker to pick stocks for you.
3. Invest in a low cost index fund or passively managed fund that mirrors the returns of its respective index.

Because capital markets are fairly efficient, professional stock-pickers have historically had a difficult time outperforming a comparable benchmark. According to SPIVA, over the past ten years ending June 30, 2019, 87% of domestic large cap, actively managed funds under-performed the S&P 500 index.

For Coffeehouse Investors, common sense wisdom suggests you are better off approximating the stock market average through low cost index funds and passively managed funds.

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As the author of The Coffeehouse Investor, Bill Schultheis is also a Financial Advisor and Co-founder of Soundmark Wealth Management.

The Three Principles

1. Save for a rainy day.

Develop a long term financial plan.

2. Don’t put all your eggs in one basket.

Diversify in different asset classes.

3. There is no such thing as a free lunch.

Capture the entire return of each basket, or asset class, through low cost index funds.

The Coffee House Investor Book Cover

THE COFFEEHOUSE INVESTOR BOOK

How to Build Wealth, Ignore Wall Street & Get On With Your Life
by Bill Schultheis

Chapter One×
Download the first chapter of The Coffeehouse Investor.
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Who is The Coffeehouse Investor?

This non-commercial web site is for investors across the nation and around the world who recognize and embrace the sophistication of simplicity in their investment portfolios as well as their personal lives.

The Coffeehouse Investor does not provide financial advice - our purpose is to provide creative education for investors who want to build wealth, ignore Wall Street and get on with their lives by making informed, intelligent investment decisions.