Optimizing is often the strategy of people who have specific goals and feel the need to do everything in their power to achieve them. Simplifying is generally the strategy of people who view the world in terms of systems. The best systems are simple, and for good reason. Complicated systems have more opportunities for failure. Human nature is such that we’re good at following simple systems and not so good at following complicated systems.–Abnormal Returns
One of the most important fundamental rules for investing is to never buy anything that you do not understand. A simple investing system using low cost index funds will help you avoid the numerous opportunities for things to blow up. This often happens with complicated, opaque, and fragile high cost investment strategies found in many hedge funds and investment banks. It is no coincidence that simple dollar cost averaging into passive market indices will blow the doors off these complicated systems. Investing is one field where the adage” you get what you pay for” is undeniably false.