Adviser pushes ‘passive approach to stock investing

Larry Swedroe, a nationally known author and investment adviser, brought his message of the passive asset management of investment strategy to Florence on Tuesday.
Swedroe, in an interview with the Morning News, said he recommends investors follow five key points:
—Give up hope of “beating the market.”
—Develop an investment plan and write it down.
—Buy funds that use the passive asset management strategy and that diversify globally.
—Rebalance your accounts regularly.
—Tax manage your accounts.

The author of many investment books, including “The Only Guide to a Winning Investment Strategy You’ll Ever Need,” was in town to speak at an event sponsored by Webster-Rogers, a Florence-based accounting firm.

But Swedroe spent about an hour before his talk explaining his passive asset approach.

He says 90 percent of investors follow an active approach, but that he is among about 10 percent of investors who follow the passive approach, which he said involves two key points — buy and hold stocks in funds that also follow the same principal.

He peppers his explanations with comparisons to betting on sports to the approach some investors like to use.

But he said everyone knows the same information about the good companies, bad companies, good teams and bad teams.

The only way to “beat the system” is to have inside information, which in stock investing gets you in trouble with the law.

He said to remember the bookies usually “win” and the big institutional investors win and the others usually lose.

He pushes his approach, which doesn’t promise home runs, but also doesn’t have a big downside, either.

His firm, BAM Advisor Services, provides investment advice to Certified Public Accounting investment advisers.

He said he tries to approach investing in a way that most people can understand and he also tries to write his books the same way.

He also is a frequent guest on national television business networks about financial matters.