AMONG THE MANY people around the world who can impact our success as investors, two rank as the most important to know and understand. Yet many investors fail to recognize this reality.
Sure, Warren Buffett and Janet Yellen and Burt Malkiel are well worth listening to and learning from. There are also many others at home and abroad who are important. But all serious students of investing would agree that the two I have in mind are much more important.

YOU MIGHT ASK, “What makes an exchange-traded fund the best?” While it’s hard to say for sure which are the right funds to own, it’s often easy to spot a fund that should be tossed to the curb.
Take the iShares suite of exchange-traded index funds (ETFs). Did you know iShares offers two nearly identical emerging markets funds, iShares MSCI Emerging Markets ETF (symbol: EEM) and iShares Core MSCI Emerging Markets ETF (IEMG)? The only material difference is what you pay.

LAST WEEK, I REFERRED to the stock market as a hall of mirrors. That was perhaps too kind. With its erratic and often illogical movements, the market also has elements of a pinball machine, a rollercoaster and maybe a clown car. This has always been the case, but it feels especially true this year. There’s one silver lining, though. The market’s recent behavior highlights many of the behavioral biases we read about in textbooks.

I WAS WRITING magazine stories back in 1996, recommending stocks and mutual funds. Privately, I worried that readers might think I had some genuine insight—and they might even invest in the ways I suggested.
Propelled by that fear, I favored safe stories, like the best electric utility stocks or the outlook for U.S. savings bonds. I ransacked the library, looking for sure-fire, can’t miss investments. Surprisingly, I found one—something called an index fund.
Twenty-five years ago,

INVESTMENT RESEARCH has overwhelmingly shown that active stock strategies perform poorly over long periods compared to buying index funds and simply collecting the market’s return.
There’s still some debate about whether the best active managers are a smart bet—and whether we can count on them continuing to perform well. But there’s no question that active stock management, on average, has destroyed value for clients.
Yet active strategies remain popular with both individual investors and their wealth managers.

INTEREST RATES HAVE been low for years, with 10-year Treasury notes now yielding some 1.4%. How about dividend-paying stocks instead? Many pay twice what Treasurys currently yield, though obviously with more risk. My strategy: Instead of a classic 60% stock-40% bond mix, I’ve landed at roughly 70% stocks, with another 15% to 25% in individual stocks against which I’ve written call options.
By selling call options, I give the buyers the right to purchase the underlying stock from me at a specified price—the so-called strike price—at any time between now and when the options expire.

TIME IS IMPORTANT in investing—far more important than most of us seem to appreciate when we structure our portfolio’s asset mix.
Regular readers may remember that I believe we tend to focus too much on one part of our total portfolio, the securities we own. We often ignore other important parts of our total portfolio, such as Social Security, any pension plan, our homes and—particularly for the young—the present value of our future earning power.

EVEN AS I’VE WRITTEN regularly for HumbleDollar over the past year, I’ve also learned a lot from the other writers. There have been specific tips I’ve picked up, as well as more general strategies that have influenced my thinking.
For instance, John Lim and others have touted the benefits of Series I savings bonds, with their virtually risk-free interest rate, currently set at a whopping 7.12%. My wife and I took the plunge,

I OWN JUST TWO individual stocks. One is Wells Fargo, which I’ve discussed before. The other is Total, recently renamed TotalEnergies, a major oil company headquartered in France.
I was initially attracted to Total by its generous dividend and enormous underperformance in 2020. Yes, great underperformance—not outperformance—often piques my interest. Of course, declining stock prices and generous dividend yields go hand in hand. As the price of oil stocks cratered in 2020, their dividend yields soared.

MY PORTFOLIO HAS evolved over my 35 years as an investor, as I’ve learned more and as new funds have become available. A total stock market index fund? Sure, I’ll consolidate money in that. An emerging markets index fund? Yeah, a modest stake looks promising. How about a small-cap value index fund? The academic literature says that makes sense.
Today, I own a dozen different Vanguard Group mutual funds, each giving me exposure to a different part of the global financial markets.

I’M A LIFELONG football fan who’s played fantasy football for 20 years. What do I have to show for it? Zero league titles, a staunch ambivalence about fantasy football—and three investing maxims.
Every fantasy football season starts with the draft. Three intoxicating forces combine to make the draft a great time: predictions, customization and pride. I’ve come to realize that the draft accounts for about 90% of the appeal of the whole fantasy football concept.

NEW RESEARCH suggests that target-date retirement funds—which currently receive a majority of contributions to 401(k) plans—are missing the mark.
Target funds’ returns, in aggregate, lagged those of replica portfolios built with exchange-traded funds (ETFs) by one percentage point a year, according to University of Arizona finance professor David C. Brown, one of the study’s authors.
The majority of the underperformance was due to higher fees, Brown said. Target-date funds are funds-of-funds. Most fund families charge investors layers of management fees—both on the target-date fund itself and on the underlying funds.

I’M USUALLY BORING when it comes to investing. My portfolio is mostly comprised of stock and bond index funds. I dabble in individual stocks when I come across something I see as interesting, but individual stocks have never made up more than 5% of my portfolio. I currently hold just three individual stocks amounting to less than 2% of my investment holdings.
While my interest is occasionally piqued by stocks with upside potential, I’m more often drawn to companies I see as having significant downside.

THE COSTS WE PAY for active investment management are important—far more important than most investors seem to realize, particularly when the stock market is going up and up.
Start with an interesting reality: Nobody ever actually pays such fees by writing a check. Graciously, money managers take care of that, deducting their fees from the assets they manage for us. Out of sight, out of mind. But wait: Perhaps, instead of being grateful, we should be careful to understand what’s going on.

IF YOU’RE LIKE ME, you want to stick with your long-term investment plan, while remaining open to new ideas. It’s a balancing act—to avoid missing a new, long-lasting trend, while not getting caught up in a bubble.
That’s how I feel about cryptocurrencies. Their market cap has swelled to $2.6 trillion. But what does that mean? Contrast that to the value of the global stock and bond markets: Each is about $125 trillion.
To me,