Carnival of Passive Investing # 13 - December 2011
Thanks to everyone for participating. Congrats to this month's top 3 picks (shown below)!
1. Barb Friedberg presents Investing Rule 1: Know Thyself posted at Barbara Friedberg Personal Finance, saying, “Learn why there is no all purpose asset allocation. Understand your risk tolerance and investing style before making your investing decisions.”
2. Jacob presents Opening and Managing a Self-Employed Individual / Solo 401(k) posted at My Personal Finance Journey, saying, “The self-employed individual 401(k) is an effective vehicle for shielding the returns of your index mutual funds and other passively managed assets. This post discusses the various steps to initiate and successfully complete the account application process.”
3. Jim Yih presents Model Investment Portfolios posted at Retire Happy Blog, saying, “Every portfolio should start with an allocation of assets based on your specific risk tolerance, investment objectives and time horizon.”
WHAT IS PASSIVE INVESTING?
Each month, there seems to continue to be quite a bit of confusion about what constitutes passive investing and what DOES NOT (i.e. - which posts will be included in the carnival or screened out). There's really nothing wrong with this confusion, as indeed, one of the original goals of this Carnival was to help spread the word about this specific niche of investing styles. As such, we want to make sure that everyone knows what passive investing is in order to keep the articles published in the editions of The Carnival of Passive Investing focused.
Overall, passive investing involves the use of passively managed (not actively managed - so avoiding individual stock buying/selling) investing instruments, such as index ETFs or mutual funds, in order to invest with the market. By using this method and avoiding individual stock selection, we are able to beat 70% or more of the investing "professionals" out there.
Examples of passive investing include asset allocation, index investing, ETFs, portfolio rebalancing due to market fluctuations, asset class evaluation, controlling investor emotions, strategies for adding new funds to your investment portfolio (dollar cost/value averaging), etc. Passive investing does NOT include INDIVIDUAL STOCK PICKING (even if they are dividend stocks), CREATING PASSIVE INCOME, OR MARKET TIMING. A definition of passive investing can be found here as well.
LOOKING AHEAD TO NEXT MONTH'S EDITION - The 1st of 2012!
Thanks to our participants and host, Boomer & Echo. Paula from Afford Anything will be our host of the next (January 2012 - # 14) edition, scheduled to go live on February 1st, 2012. This will mark the first Carnival of Passive Investing in the New Year of 2012. I look forward to continuing organizing The Carnival in 2012 once again! Be sure to get your articles in now (see instructions below)!
For the January 2012 Carnival, passive investing author, Mark Hebner, of the book, Index Funds: The 12-Step Recovery Program for Active Investors, will be helping Paula to screen/rank the top articles. We're very grateful to have Mark's help, and I'm looking forward to reading all of the articles!
Since Blog Carnival has ONCE AGAIN started to not work at all recently (most everyone that I know has had technical difficulties), you can use the Blog Carnival HQ submission form that Canadian Finance Blog developed by clicking here.
Also, I am now beginning to put together the hosting schedule for 2012 since the 2011 is coming to a close. Currently, all months of October, November, and December 2012 (this carnival is only monthly) are open, so if you'd be interested in hosting, take a look at the hosting schedule and then send me an email to get on the schedule.