There's More to Investing Than Risk and Return

Morningstar personal finance expert Christine Benz on the importance of peace of mind to investors

Christine Benz 6 October, 2021 | 11:52AM
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I recently wrote an article about my "too hard" pile – Charlie Munger's term for investments that are too complicated to make it into Berkshire Hathaway's portfolio of companies. Some people collect more investments and build more-complicated portfolios as they pick up experience and assets. I'm trying to take Munger's lead and go in the opposite direction. The more I know, the more I can't be bothered with the arcane, the volatile, the hard to understand. Instead, I crave simplicity, peace of mind, and the ability to be asleep at the switch and know that things will be OK. I also put a big premium on my time. If an investment requires frequent monitoring, I'm out.

I'm not alone in this mindset; I heard from several readers after the column published that they, too, have "too hard" piles. Given that, it made me wonder why risk and return dominate the discussion of investments' worthiness? Why aren't we also judging investments, portfolios, and financial choices based on whether they impart peace of mind and are simple, livable, and low maintenance?

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Christine Benz

Christine Benz  is director of personal finance at Morningstar and author of 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances.