I had a call the other day from a BBC journalist. She was making a programme about investing for beginners. What, she asked, would I say is the ABC of investing?
Thankfully, I was well prepared because my colleagues and I had just produced a video on that very subject. The video features Professor Elroy Dimson, one of the most highly regarded academics in the field of investing, asset management and financial market history. His book, Triumph of the Optimists, which he co-wrote with Paul Marsh and Mike Staunton, is widely viewed as the most authoritative book on the lessons to learn from the history of the markets.
We interviewed Professor Dimson recently and asked him to summarise what he’s learned from his life’s work about how to invest, and this short video is the result. In a nutshell, he says, there are three successful investing: diversification, cost control and simplicity. I couldn’t have put it better myself.
So, there you have it. Diversification, cost control and simplicity — the ABC of investing.