There's More to Investing Than Just Risk and Return

In praise of what can't be measured.

Christine Benz 5 October, 2021 | 1:57AM
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Christie Benz

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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About Author

Christine Benz

Christine Benz  Christine Benz is Morningstar's director of personal finance and author of 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances and the Morningstar Guide to Mutual Funds: 5-Star Strategies for Success. Follow Christine on Twitter: @christine_benz.

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