Short-run news vs. long-run profits

Sensible, low-risk investing isn't exciting or newsworthy. It isn't even time-intensive, except at first. It  requires investors to spend some time examining their goals, estimating their risk tolerance and calculating how best to allocate their available funds among appropriate, diversified investments. Then they buy those investments and hold them. Occasionally, perhaps as infrequently as once a year, they should check the performance of their investments, examine alternatives, and make adjustments, if that is needed.

This results in a slow, gradual buildup of wealth -- not the stuff that attracts magazine subscribers, television viewers or Web site visitors. Who would spend money or time each week to be told again and again, "Determine the most appropriate investments for you, then buy them and hold them for the long term"? No, the kind of thing that attracts and viewers is rapidly changing news and get-rich-quick tips -- "Ten Mutual Funds You Should Buy Now," "Dow Drops 142 Points," and "Hot Stocks for Summer.”

Looking at the long term

For long-term investors, such headlines are irrelevant at best.

A long-term investor does not try to forecast the direction of the market, other than to assume that its historical upward trend will continue in the long run, despite unpredictable ups and downs in the short run. By buying and holding an investment, a long-term investor also avoids excessive broker's fees and other transaction costs that short-run investors incur.

Personal finance magazines, stock market TV shows and most investment-related Web sites need to attract readers and viewers by providing a continuous flow of short-run information. If readers and viewers don’t find that exciting short-sighted information, they won't return. So that’s what they get, even though it’s not good for them.

What Sensible-Investor has to offer

Sensible-Investor provides guidance for novice and long-term investors seeking basic advice about personal finance from the World Wide Web. To do this, Sensible-Investor checks out Web sites from the down-to-earth viewpoint of the long-run investor, looking for sites that will be useful and do not pander to short-term thinking.

Some novice investors will visit this site once, use it to locate a helpful personal finance Web site, and never return again. That's OK. But there are reasons to return.

From time to time, Sensible-Investor will critique personal finance commentaries that appear in the press and on-line. For your own edification or amusement, you may find that these critiques will be worth a return visit, whether you agree with them or not.

The Internet is such a rapidly changing place that the best personal finance Web site today may soon vanish, or be succeeded by a better one. You may want to return to this site to see what has improved in general, or to watch for the appearance of  a new or revised Web site that finally clarifies a specific topic that  confused you in the past.