1999-2000: Lesson of Investment

"Those who cannot remember the past are condemned to repeat it".
-George Santayana (1863 - 1952), The Life of Reason, Volume 1, 1905

Some of our readers have pointed out that our postings are getting heavily
inclined to reporting on Exchange Traded Funds (ETFs).

Yes. We like ETFs and Mutual funds because we always follow these
important basic steps of investing (applicable to our target readers who
are NOT millionnaires - we always emphasize on NOT):

(i) Know who you are and what you are. Remember most probably
nothing can dramatically change your personal finance if you donot
deserve it. In 1999-2000 so many people earned so much from
"unwarranted exuberance" of stocks but starting from March'2000 they
lost much more than that simply because they did not deserve that
money.
Depending on who and what you are, determine how much risk you can
afford. If you are not a good swimmer, donot jump into the sea on a
tornado night. If you are NOT a millionaire, do not throw your 5000 $
to that nanotechnology stock which, experts are saying, would boom like
another Microsoft within 2 years. Be stingy and frugal while investing -
nothing wrong in it! In May of 2004 we observed with amusement that
some of our friends were driving 7 miles to get gas for their SUVs from
Costco (which charges a few cents less per gallon), while their investments
in stocks like Infosys, Commerce One and JDS Uniphase were plunging
by thousands of dollars each hour!

... As John Bogle (Vanguard's founder) once said, "We all are too smart
for our own good".

Oh God! We spent too much of time on item (i) itself. Next two rules are
short:

ii) Diversify your investment and donot run too much after the most
lucrative one.

(iii) Invest regularly in a broader market and try to keep your
investment cost low. Dollar-cost averaging is a very powerful investment.
So we like Funds. So, hardly ever we purchase individual stocks.