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D.Muthukrishnan (Muthu), Certified Financial Planner- Personal Financial Advisor

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How to be ahead of 99.9% investors?

Posted by Muthu on September 11, 2014

It’s an inspiring tale… a triumph of lethargy and sloth.

And if you take its wisdom to heart, you’ll be ahead of 99.9% of your fellow investors. The tale – and the wisdom – comes from Robert Kirby. Kirby was a great money manager that wrote a lot of wise things about investing. He was active in the latter half of the 20th century… and cut from the same intellectual cloth as Warren Buffett.

One of Kirby’s best ideas is the “coffee can” portfolio…

Kirby first wrote about the coffee can idea in the fall of 1984 in The Journal of Portfolio Management

The coffee can portfolio concept harkens back to the Old West, when people put their valuable possessions in a coffee can and kept it under the mattress,” Kirby wrote. “The success of the program depended entirely on the wisdom and foresight used to select the objects to be placed in the coffee can to begin with.”

The idea is simple enough: You find the best stocks you can and let them sit for 10 years. You incur practically no costs with such a portfolio. And it is certainly easy to manage.

The biggest benefit, though, is a bit more subtle and meaningful. It works because it keeps your worst instincts from hurting you.

In his paper, Kirby told the story about how his idea came about.

(To read more: http://thecrux.com/this-simple-advice-will-put-you-ahead-of-99-9-of-investors/)

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