Investing is such a fascinating game. There are so many different schools of thought, different approaches and experts to try to gleam advice from. There is a plethora of gurus everywhere you turn. And they all have one thing in ok common. Everyone tells you that you will make your fortune through ACTIVITY. These activities can range from day trading stocks, flipping real estate, buying and selling options, timing stock markets and many other strategies. They all say you need to be in the game and doing something. These strategies are what I would classify as high risk, high reward. But as I get older, I’m convinced you will make your fortune from INACTIVITY. After all, as I mentioned in a previous post there are two basic rules to investing 1. Never lose money 2. Never forget rule number 1.

Full disclosure, I have not followed this line of reasoning for most of my investing career. But you know what? Sometimes the best lessons are those learned from mistakes. You go through life, try different things, stay diligent and if you learn from your mistakes, you get more polished as time goes on. You become weathered, refined and more efficient. But the key is you have to learn and adapt.

That brings me to the point of this post. My advice to those reading is to be boring. Your investing style maybe shouldn’t be something to brag about at a party? Just my two cents. Boring is probably the ideal approach long term for most people. Be the tortoise. I have read this so many times over the past 15 years, and at 37 I finally understand why this is solid advice.

Over the last three months, I have simplified and streamlined my investments. I have moved out of any stock or fund that requires any kind of thought or decision making. Basically I have adjusted my portfolio to be bullet proof. A no brainer portfolio if you will. And I have to say, it’s been one of the best decisions I could have made. I have become the financial equivalent of a basic bitch.

Being boring is, well boring. I find myself nowadays barely checking my various stock accounts. I go weeks sometimes without checking stock prices, the S&P 500 or even real estate prices. I mean what difference does it make really? With my stocks I am 80% indexed in plain Jane total stock market index funds and S&P 500 index funds. I would simplify even more if I could but some accounts only offer certain funds. With the real estate I own, I hardly check the market value of them. Why would I? I do an analysis once a year and type up a profit and loss statement with a few figures such as return on equity and cash on cash return. And as long as these figures are acceptable, I file it and then go about my life.

This level of boring breeds efficiency. it also strips emotion out of the equation. I know that stocks retain earnings and will reinvest those earnings and increase profits over time. So, I own a Total Stock Market Index fund to remove any decision making and spread out my risk. I don’t need to think, to stress or be influenced by market moves. Which could easily coerce me into making costly mistakes. I don’t need to worry if the mutual fund I picked that has a certain strategy was a smart move or if the stock I picked will turn out ok. I just own every stock. And I just keep buying. Consistently. Whether the markets are up or down, to eliminate the element of trying to time the market. You see, boring is a superpower in many ways. And it all but guarantees you follow the two rules of investing mentioned above.

The epitome of boring is Warren Buffett. 99% of his wealth is in Berkshire Hathaway Stock, to the tune of 380k class A shares. Berkshire is not very well known or understood. But I would argue it is a boring company/investment. Buffet’s main job is allocating the capital that Berkshire retains into more businesses and or marketable securities, with the goal of earning more as the years go by. But, he famously missed the dot.com bubble by avoiding any and all internet stocks. In fact, he was laughed at and mocked in the late 90’s as having lost his touch and for being way to old fashioned for such a new tech centric economy. He famously gave a speech in 1999 in Sun Valley Idaho in front of a who’s who of business and tech icons deriding the tech stocks as being wildly over priced. You see, Buffett has always invested in very boring and very predictable companies. To him stability is gold. And that has been his genius. He sticks with what he knows. A famous quote from Buffett at his shareholder meeting in may of 2001:

“We have embraced the 21st century by entering such cutting edge industries as brick, carpet, insulation and paint. Try to control your excitement.”

Suffice it to say, Buffett is boring. Over the last two and a half years, fanciful IPO’s and SPAC’s have brought a level of excitement and capital to Wall Street not seen in decades. Buffett on the other hand chose to hold, cash. To the tune of 145 billion. While everyone else was focused on activity, Buffett focused on inactivity. He did nothing. How did this work out for him?

Remember, investing is kind of like baseball with no called strikes. You don’t have to swing. You can sit at the plate forever and do nothing. And when you do swing, you don’t need to swing for the fences every time. Singles and doubles will produce a satisfactory batting average over the course of your investable career. Think batting average( compounding rate) not home run count.