The Most Important Lessons in Investing

Meet with PWL Capital: calendly.com/d/cpws-jyp-znp
Over the last 10 years I have spoken to thousands of individual investors about their investments and financial plans while working at PWL Capital, and I have interviewed some of the smartest people in finance, economics, and psychology on the Rational Reminder podcast.
This is what I have learned. These are all lessons that investors will learn eventually, though many will learn them the hard way.
0:29 1. You’re not that smart (relative to the market).
0:42 2. This time is always different.
1:03 3. The market is forward-looking.
1:20 4. Market forecasts are not useful.
1:34 5. Time in the market beats timing the market.
1:47 6. Most funds do not beat the market.
2:12 7. Incentives matter.
2:26 8. Expected economic growth and stock returns are unrelated.
3:12 9. Good portfolio management does not make up for bad financial planning.
3:27 10. Risk and expected returns are positively related.
3:42 11. The risk-expected return trade-off has a term structure.
3:58 12. Fees and taxes matter.
4:12 13. Complexity and costs are positively related.
4:27 14. There is no single optimal investment strategy.
4:44 15. The best investment strategy for you is the one that you can stick with.
5:00 16. There is no such thing as a “passive” investment.
5:14 17. Wealth does not give you access to market-beating investments.
5:30 18. Diversification is (still) the only free lunch in investing.
5:44 19. Investments should be evaluated on process, not outcome.
5:58 20. Investing has been solved.
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[@bc41]

write a book Ben

[@wexwexexort]

i would read.

[@Adrian-cn5rk]

Two versions please. A dummies version for me

[@zacharyanderson5878]

I would read too

[@JLchevz]

indeed

[@tarekyared4404]

YOU write a book.

[@superkebabi]

This is the kind of thing you save and come back to every year to keep your head on straight. Thanks Ben.

[@longpham3986]

This is the kind of things you save and come back to every time you see a bear or when your emotion gets the better of you!

[@TheWealthyBarber]

Hey Ben, it's Dave Chilton, The Wealthy Barber. I enjoy your videos and podcast, especially this one! You're well-informed and very genuine. It's clear you really want to help people. Well done!

[@BenFelixCSI]

Hey Dave! Thanks so much. That means a lot coming from you. I saw the new initiative you’re working on. I’d love to contribute. Don’t be shy to reach out.

[@zerphase]

​@@BenFelixCSII have to disagree on increased wealth not giving you access to better investments. If you have a hundred million dollars, or even ten million you can bailout an investment by giving the bus a loan to keep the business operating, until they can hit market. Mostly relevant to biotech investments.

[@geraldt331]

Purchasing a stock may seem straightforward, but selecting the correct stock without a proven strategy can be exceedingly challenging. I've been working on expanding my $210K portfolio for a while, and my primary obstacle is the lack of clear entry and exit strategies. Any advice on this matter would be greatly appreciated.

[@yeslahykcim]

the strategies are quite rigorous for the regular-Joe. As a matter of fact, they are mostly successfully carried out by pros who have had a great deal of skillset/knowledge to pull such trades off.

[@Jadechurch-ql3do]

I agree, having a brokerage advisor for investing is genius! Amidst the financial crisis in 2008, I was really having investing nightmare prior touching base with a advisor. In a nutshell, i've accrued over $2m with the help of my advisor from an initial $350k investment.

[@lucaswilliams9992]

Please can you leave the info of your lnvestment advsor here? I’m in dire need for one

[@Jadechurch-ql3do]

Laila artine kassardjian' is the licensed coach I use. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment.

[@brianwhitehawker1756]

Thank you for this Pointer. It was easy to find your handler, She seems very proficient and flexible. I booked a call session with her.

[@spartan19752008]

Ben, you are precise and perfectly paced. The advice is articulated simply and comprehensively. Your channel is invaluable In a world of ever-increasing jargon, excess information and incentivised bankers and finance influencers.

[@santiagoeguren6837]

you are one of the few who speaks based on evidence!!!

[@bulalirozani4392]

Its rare that you find content creators who are clear concise and provide information without ulterior motives, "Incentives Matter" the financial services industry still has along way ti go in offering and catering to the needs of consumers rather than the needs of the suppliers, this is despite regulation.

[@Nounooon]

It’s more than rare, he’s unique

[@TheSpacePope001]

Investing in yourself can be one of your greatest assets. Learning a new skill and being able to sell that in the form of a product or service can yield far greater returns than market average.

[@kylebeggs2617]

I would like to request a video on your background and career journey. As a mechanical engineer who has become more interested in finance, I find it intriguing that you began as an engineer and ended up here. You have quickly become my favorite financial resource and I suspect it is because you approach and explain things that make perfect sense to me. As you would suspect, I believe it is due to our similar backgrounds. Keep up the great work!

[@Stoicscienceguy]

Ben, thank you so much for publishing the content you do. Recently, I have been looking into ways to invest some money, and if I hadn’t stumbled across your channel, I think I would have made some decisions that probably wouldn’t have paid off. I really appreciate the references and evidence-based approach.

[@dimon22323]

Way too many good advices for single short video! Much appreciated.

[@jasonmacfarlund2703]

You are absolutely the best.

[@danguee1]

I have to say I had doubts about you when I watched my first video of yours earlier today. I thought you sounded a bit simplistic and suffering from recency bias. But I now think of you as a) very grounded b) very knowledgeable and well-read c) excellent communicator who doesn't dumb it down (though also good at 'normalising' jargon and hard concepts for ordinary viewers) and d) as such, a 'force for good'. Excellent stuff! Given my belated determination - after a decade of now embarrassing-looking investing mistakes - to move from picked stocks and a few managed funds to index trackers, consider me subscribed....

[@user-ph5tv8nt9y]

Excellent contribution: full of common sense, pragmatic and simply announcing the basic rules. Thanks a lot.

[@luiscunha6657]

A short Masterpiece. Thank you so much.

[@bigdogtom55]

Thank you Ben, for your great insight...

[@m136dalie]

I appreciate your transparency, it's makes you one of the only people creating investment advice that I find trustworthy. You're a finance advisor you who tells people they don't need to pay high fees on mutual funds or even finance advisors. The solution is a boring but smart strategy of investing in low fee ETFs with realistic expectations for returns. When it comes to investing, boring advice is sensible unlike a lot of other sensationalist takes.

[@MasonKalair]

If my wife and i never invest another dollar, we will have 1.9 million at retirement. This is why people say to do everything in your power (Legally and morally) to get $100k+ invested in your 20s.

[@rrandd0]

What advice would you give to someone new to investing with around $200k to begin with?

[@MasonKalair]

I believe every investor should start with ETFs for a solid foundation, then diversify across asset classes and maintain disciplined, regular investing to minimize risks and maximize growth.

[@Maniakkkkkk]

You don't need to find the next Apple to succeed in investing. Just choose top-notch ETFs and partner with a financial advisor like I did. I turned $20k into $10k in annual dividends-a significant milestone for me today.

[@Wendytsang12]

I've been considering getting one, but haven't been proactive about it. Can you recommend your advisor? I could really use some assistance.

[@Maniakkkkkk]

She goes by ‘Jill Marie Carroll’ I suggest you look her up. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.

[@Capatron1]

Man this is gold, is like summing up a huge part of your videos! Commenting so you get to know it is much appreciated and so it gets the algorithm to show it to more eyeballs

[@albertotoia]

Just wanted to say thanks. Your videos leave a lot of value (and not the factor) and consciousness to investors. Really, a lot.

[@robertchaplin]

Ben I do not pretend to be an expert but over the past 40 years I have found out the following: not nearly enough attention is given to time, secondly statistics plays a much more important role than generally recognized and three years ago I bought a book entitled “Against the Gods, the remarkable story of risk”. To me the book mentioned is a real eye opener, it is now my foundation in this area. Finally thanks for all of your help in this field, it has been helpful even though I am not Canadian.

[@jugzster]

Investing into your or other people's happiness is also important. Sometimes those can even give you more satisfaction than seeing your net worth go up. Whether it be on improving yourself, going on experiences with family/friends, donating, or buying that small dessert Another valuable video as usual, thanks Ben!

[@pegah_on_the_road]

I have a lot of respect for you. Absolutely great work. Thanks a lot.

[@user-gz6mz9oh1q]

Thanks Ben for making it all simple for us.

[@wendynoble6545]

This! I'm going to have to listen a few more times.

[@PassRush49]

Excellent summary of investing everyone can learn from.

[@pongop]

Thank you for the interesting lessons!

[@lucian2643]

Thank you very much for your work and this video too.

[@kadams842]

As always, great advice. Thank you, Ben

[@ryanlee7998]

Was just reviewing my index investments and this video popped up. You've got a new subscriber. Going to keep this video saved to come back to so i can stick to the plan lol

[@ZacharyDuvallT]

Love it, thanks for sharing!

[@benjaminramsey4695]

Excellent list, well stated and summarized!

[@Mucho_Dars]

Just discovered your channel, love the straightforwardness and no bullshit beating around the bush. Keep it up! Got yourself a new sub

[@nixes1636]

Great video. Great points and totally agree with all of them.

[@Hengst94]

Fantastic video! Thanks for the quality information.

[@jameszeng2666]

This is so true. I am 100% into this.

[@user-wb8fd1kp7y]

I would add: these most important lessons are also applicable, relevant and appropriate to investors living in south equator countries like me. Thank you very much, indeed Mr. Ben Felix.

[@thiagosouza9542]

Great! Thanks a lot.

[@lesleyjohnson8488]

This is awesome, Ben - well done 😊

[@KnowArt]

Another big one I've heard: Financial markets are much more efficient than you think, non-financial markets are much less efficient than you think. That one opportunity you see in the stock market is bs, while that opportunity you don't act on in the real world because "if it was a good idea someone would've already done it" is actually a huge loss.

[@istvannagy1849]

Very insightful as always

[@MrWilson-zx9ix]

Nice one Ben. Cheers.

[@raosiddharth4726]

I try to read the papers which you mention, those papers do give a lot of insight into results and time frame of methodology applied. Truly amazing videos you put on

[@douglaschester2097]

This is amazing. *“How to build wealth”*

[@douglaschester2097]

The first step to building wealth is figuring out your goaIs and risk toIerance - either on your own or with the heIp of a financiaI pIanner, and foIIowing through with an inteIIigent pIan, you wiII gain financiaI growth over the years and enjoy the benefits of managing your money.

[@douglaschester2097]

I am fortunate I made productive decisions that changed my finances (gathered over 1M in 2years) through my financiaI planner. Got my 2nd house in Feb, and hoping to retire soon. Give this a try and attain good-returns.

[@douglaschester2097]

researvh the name, if you care.

[@douglaschester2097]

REBECCA MARTIN WATSON

[@tiagosantos680]

Briliant video to keep being reminded of our place, thanks Ben

[@fbt0815]

insanely good content on this channel. thanks, ben!

[@jpfontenele1650]

thank you

[@CanadianFinanceSimplified]

You're the best Ben and obviously the main influence to my investment philosophies.

[@venkatinator]

To the point. You are the best. Keep it up!

[@haroldspanier9185]

Best advice yet from Ben Felix. A true pro willing to share his knowledge and experience. Thank you!

[@samuelmandel4537]

Fantastic

[@susymay7831]

Really, really good video with nice timestamps!!! ❤

[@WarmstarX]

Great summary! Need these on a poster. Important corollary to the risk discussion that I do find is often missed: higher risk does not always mean higher expected returns. Only compensated risks do that.

[@saulomariano3800]

Great content, Ben!

[@RDM1776]

Great video! Related to financial planning, an investor needs to know their goal and their risk tolerance.

[@Martin_Edmondson]

"The stock market is a device for transferring money from the impatient to the patient." - Buffett. Having a long term mindset was what helped me the most in growing my money. It's hard to do especially when you are young, but it is absolutely astonishing how much difference it can make.

[@CleanCereals]

Love your content! Your and James Shack's videos really educated me about investing in the last couple of weeks. Finally started to invest in the MSCI World SRI :)

[@skzion2]

Nice job.

[@terryadams1830]

Ben, you are a national treasure. I hope Canada appreciates you as much as your friends below the border do!

[@charlesvincett84]

Great video..

[@bearcreekmanager1283]

Ben, your advice is all golden and I agree with it. Distilling everything out, the basic message is: "put your investible money into the market as soon as you get it - don't time it, don't DCA, don't look at it (too often)". The basic premise is the market is a long, gradual incline. My question for you: is there any magic to getting out....or do all the same rules of getting in apply exactly in reverse (aka get out whenever you need to)?

[@IAmebAdger]

I would imagine since time in the market is so important, that logically leads to two things: get into the market ASAP, get out of the market as slowly as you can.

[@Earth3077]

​@@IAmebAdger Agreed, although you should get better results with a little flexibility depending on recent performance. A variable withdrawal rate can reduce the risk of running out of money while increasing the amount you withdraw during periods of good returns.

[@jamesreid-lourie5636]

dang, i haven't watched ben's videos for a while now. good to know he's still the blink champ. thanks ben!

[@vojtechsulc5899]

Nice summary. :-)

[@nkjoep]

Woah. Many problems have been solved. It doesn’t make them any easier. Great vid and lessons 🤙

[@sopcaja]

Thank You Ben for these invaluable lessons. I love the last one :) Call me Boglehead but I will stick with my low cost index fund :)

[@wendynoble6545]

One lesson I would add is "investing should be boring". Excitement is for day traders, and day traders don't get wealthy.

[@gus_720]

Would be great to see a RR interview with Robert Shiller!

[@BobDobbs681]

Good video. I have a sense of most of these notions but find it hard to convey them to others succinctly. Next time I'll have them watch this video.

[@CanadianOptionsTrader]

Here's one that I learned: Someone's confidence level when they speak about the market does not necessarily correlate with their success rate. High confidence does not mean the personal will end up being right more than anyone else with an opionion about the market.

[@joseraulmachadofernandez9744]

Best Ben Felix video ever. Actually, if you ever write a book, just use this lecons for chapters and I'll be the first one to buy a copy.

[@henrymakepeace]

Excellent. Maybe you could mention how important margin of safety is. When you lose money, it gets harder to get back where you were. Also Munger's words, investing in good companies at fair price is better than investing in mediocre companies at low price in the long run.

[@AlexFlavell]

Go Ben! Go Ben! Go Ben!!!

[@_BoomShakalaka_]

Thank you King 👑

[@joshsantos9965]

Does buying 100% VT in my retirement accounts make the most sense to buy the market? I’m 30 years old in the US and feel the FTSE Global All Cap Index makes the most sense for low cost long term index investing.

[@ramilrahim0v]

Stripped down to the bones, but all absolutely true

[@lystraeus-]

Thank you for the practical exercise at the end, Ben. As a financial advisor, you'd end on the importance of financial planning, as that is where your incentive is. You even told us you'd do that during the video! Thanks again. BTW what do you think of the "second free lunch": volatility prediction? It's allowed by the EMH.

[@me0101001000]

I said it before on another one of your videos, but I'll say it again. One of my business professors in undergrad told my class that unless we plan on joining a big name hedge fund with lots of powerful research tools available, don't day trade. Just dollar cost average into a broad market index fund, and take the time you would have spent looking at charts, and spend that time learning three things. One thing that's useful, one thing that's interesting, and one thing that's just plain fun.

[@michaelherrlich1536]

The videos compresses a lot of information and is still short. Well done. "This time is always different" is a bit odd. The well known narrative I know that is not true is "everything is different this time" when people think old knowledge is no longer true and then suddenly a bubble pops. Your combo of the theme changes but the playbook is the same is aiming for the narrative I mentioned just in a somehow confusing way :)

[@RyanStoneham]

Excellent video, Ben (as usual). Any chance you can create a series out of this and expand more on each topic?

[@EverlyndPerez]

I’ve been saving for a long time instead of investing, and right now I only have about $516k. I'm not sure how to make it grow, considering all the inflation, into something substantial that I might use for retirement. I just here for ideas

[@Debbie.Burton]

At a point like this, when the pressure is already on you to retire, its best recommended you seek the services of an advisor, as this allows you make smarter investing decisions.

[@benitabussell5053]

A good number of people discredit the effectiveness of financial advisors in exploring new markets, but over the past 10years I’ve had a financial advisor consistently restructure and diversify my portfolio/expenses and I’ve made over $3million in gains… might not be a lot but i'm financially secure.

[@A_francis]

Can you share details of your advisor? I want to invest my increased cash flow in stocks and alternative assets to achieve financial goals.

[@benitabussell5053]

*Sharon Lynne Hart* is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.

[@Theresaa12]

I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.

[@koltonbellamy3777]

Wow this is an incredible amount of high quality information in such a short time. My brain is exploding cataloging all of this and confirming what I already knew. Thank you Ben! I am saving this for later and to share to my friends. What a great video!

[@MoementumFinance]

Thanks for sharing. A lot of wisdom for both new and experienced investors 👌 As Ben nicely pointed out "For most people, investing in a portfolio of low-cost, total market index funds is good enough, even if it is not perfect". 👏

[@evanwheeler7687]

I would even go so far as to say that investing in low cost index funds is close to perfect if we take profitability and ease of management into account. The alpha you may miss out on by investing in low cost index funds is very low compared to a relatively more complex factor portfolio that may not even win, anyway. Also, if it's easier to stay invested by buying and holding index funds, then that's a tangible benefit over more complex strategies. I say this as someone who holds significant positions in factor funds like AVUV. Index funds are one of the greatest financial inventions of the 20th century.

[@FinaISpartan]

Important lesson: think critically when getting advice from anyone, especially r/pfc

[@gregh2367]

What's pfc lol

[@rawzey]

personal finance canada subreddit

[@tomlxyz]

Only trust wsb

[@kenwen7791]

​@@tomlxyz what's wsb?

[@genorgeanaplaszio1246]

Always great to watch your videos, thank you

[@julies3490]

Thank you Ben.

[@ZelenoJabko]

cat felix

[@idontlikeyouyo]

I agree with all your lessons, except one. I AM smarter than the market. ;)

[@petert834]

This is great! So much info in what is basically bullet point format to make it quick and easy for people to digest. Then if they want to dig in any deeper on any one point then they can. Only additional point I would make is part of "You're not that smart" and "Incentives matter". Basically, that all these investment gurus you see on social media also aren't smarter than the market, and (like so much of social media) are usually trying to manipulate you for their own profit. Even some of the ones who may think they that are well-meaning and just helping others by educating them by doing some research into stocks/funds for them are still trying to build an audience which in turn affects the content they focus on. That content can still lead people to feel better about making not-so-good decisions. So they'll talk about things like high-flying tech funds/stocks, or covered-call ETFs to get really high yields where they might tell you how QYLD is actually bad, but hey JEPI is a lot better! So people buy JEPI instead of QYLD when really they should not be buying either one.

[@nanobrains]

Thanks as always for the great content. Would love for you guys to do an episode with someone from BlackRock😁 or Dimensional on all the detailed steps of launching and trading an (index) ETF. Say for example a new WorldWide fund with the Fastest Growers. -What are all the (legal, administrative, sales, listing, etc....) steps that need to be taken to get this WWFG ETF listed. How would the first price be set. How does the redeeming / trading of the underlying work with the brokers etc.. ..and what would be a success...or when would it fail. Anyway ...just an idea ! Thanks again

[@JuanTutors]

This video is so dense. It's like, "here are ALL the lessons".

[@stonks4days1]

Love your work buddy. Going to keep saying it and manifesting until it becomes true. Make an ETF bro.

[@fsdds1488]

My portfolio is still mostly stock picking for mostly one reason: I simply enjoyed making decisions myself, so my goal wasn't market beating performance but similar to long term market return. But my retirement fund was 70% total market ETF, 20% US market ETF and 10% in savings.

[@brianwhite1189]

ARK was my hard lesson. I didn't listen, until I did.

[@petergianakopoulos4926]

No one. No one beats the market over long term.

[@tullyparker]

I feel like you could apply this advice to other challenges in life. Just replace "investing" with X other thing. :)

[@DevilsClaw]

I wanted to send the Rational Reminder video to several friends, but was not sure because it is too long. This is a great summary!

[@jeroen7356]

Great lessons! I do think not all indexfunds are alike. There are enough etfs with good returns.

[@josephbangs6111]

I lucked out buying Apple, MSFT, Google and Amazon in 2011. Worst mistake was selling 10% to rebalance after talking to advisor. Hold till death

[@CanaldoHolder]

10/10

[@user-cx8cm2ht2z]

Only thing I disagree with is that wealth doesn't give you market beating opportunities. Private equity, angel investing - ok it's not passive and more like an active job of scouting promising startup but a non-wealthy individual cannot reach startup kind of returns. Also, to the extreme, pick any billionaire. They can use stocks as their collateral for loans and never pay them back by taking another loan just postponing the expiry date. Something that again a standard investor could not do. Btw, well done Ben, love your videos, always!

[@kenwen7791]

I've watched your videos for a year now and coming as far from asking on Ben Graham's asset allocation advice to understanding index investing. I've concluded this might've been the best finance channel I've come across so far... There is just one thing I have in my chest that I'd appreciate if you'd like to answer Ben... Question : Isn't factor investing more psychologically demanding than market cap weighted index fund investing? If so, by how far? Is it worth the trade off for the psychological aspect of say, seeing your AVDV or other factor tilted index etf lose to VTI or VXUS and the extra volatility that comes with it? This comes after watching one of Strongman's Personal Finance KZbin channel suggesting that factor investing is somewhat unnecessary and we should stick with market cap weighted index ETFs instead. Thank you in advance Ben.

[@deadroller]

the goat