Chapter 3: Investing Wisely

Chapter 3: Investing Wisely
Author: Ram Balakrishnan
Website: Canadian Capitalist
Background: Ram is an engineer, family man, and the blogger behind the widely popular Canadian Capitalist website. He has been mentioned frequently in the Globe and Mail, Moneysense magazine, Toronto Star, National Post, Report on Business, and many others.
Chapter Summary: Looking to get the best rates of return over the long term? It’s simpler than you think – but your investment advisor probably won’t show you this. In this chapter Ram introduces us the basics of passive investing. This style of investing is popular with academics and consumer advocates. Higher returns are achieved in the long term by reducing commission along with a buy and hold strategy. This style of investing has been shown to outperform all the other types of active investing that exists (picking stocks, timing the market, picking fund managers, etc). Passive investing is not normally promoted by the investment industry as some of the higher returns come from lowered commissions. As one industry insider put it ‘It’s the investment industry’s dirty little secret’.