Achieve Exceptional Returns with Lower Costs and Less Risk
Investing with reduced cost and minimized risk while avoiding overly complex research and the rocket science myth within the financial services industry
Retail investors on Main Street can achieve superior long-term compounding returns with lower costs and reduced risks, despite limited capital, compared to the power brokers on Wall Street.
The Low Cost / Less Risk Investing Strategy
Wall Street outperforms Main Street in total investment-related income because it tends to impose substantial advisory and subscription fees on its clients.
However, unlike the Wall Street approach, Main Street’s quality-driven value investors prioritize obtaining absolute returns through capital gains and dividends while keeping fees low or nonexistent.
Everything we often avoid is what the crowd seeks, driven by the profit-driven propaganda machine of Wall Street. Yet, our family portfolio has outperformed the S&P 500 for 17 years by implementing the investment principles and strategies of Quality Value Investing. This was my primary motivation for launching the platform, and it inspired me to share what has benefited my family with you and yours.
In response to Wall Street’s overall shortcomings for its Main Street constituents, QVI focuses on building and maintaining low-cost, lower-risk common stock portfolios that have market-beating potential over a long holding period, regardless of available capital.
Investors who choose to manage their portfolios without relying solely on a professional investment advisor or expensive investment services—utilizing self-directed methods such as online commission-free brokers, investment bloggers or podcasters, and affordable subscription services—are encouraged to adopt Quality Value Investing as one of those resources.
Sophisticated Research Scores Bonuses
There are no extra points for complex or in-depth research aside from possibly the bonus-earning fees generated by Wall Street professionals’ diligent exercise of intellectual prowess.
Skeptical individual investors on Main Street ask, “What about the portfolio performance based on the investment thesis?”
If complex, deep-dive sell-side and buy-side research produce consistent market-beating outcomes, why don’t we become wealthy by following published investment calls?
Based on historical results, the answer is more likely no than yes. The Wall Street machine has persuaded the public that advanced research methods are the most effective way to profit from investing. However, the fees generated from their analyses seem to constitute a significant portion of the profits earned by professional advisors or content providers.
I challenge readers to tune into quarterly earnings conference calls, ignoring the number-crunching and forecasts as the crystal-ball-wielding prognosticators deliver numerous bold predictions before and after the simultaneous releases. Instead, pay close attention to how senior management presents the reported earnings rather than what the team suggests in the usual practice of influencing analysts’ modeling and subsequent estimates.
Consequently, we gain better insights into senior management’s confidence and conviction, or lack thereof, by considering the intuitive context of the call rather than the noisy content of the results and guidance.
An Investment Thesis Isn’t Rocket Science
High IQs and MBAs aren’t essential for researching and writing an investment thesis on a specific high-quality company.
The financial services industry has led investors to believe that an investment thesis must be as complex as rocket science or quantum physics, crafted solely by full-time, credentialed professionals to be valid.
One must write, follow, or overpay for deep dives loaded with speculative predictive analysis and business modeling overkill.
Nope — not essential for investment success.
“XYZ stock is undervalued by 46% — here’s an in-depth analysis of why.”
Sure, right? No, thank you. Still, if only 20-25% of professional investors consistently outperform the market, how else can they justify the exorbitant fees for advisory services and newsletter subscriptions?
That is why simplicity outperforms the market more than complexity.
Learn, study, and practice stock market investing with rational thought, discipline, and patience. Remember, motivated retail investors can succeed in the stock market with lower costs and reduced risk, even with limited capital.
100% indexing—being average at best—is not necessary. It is a hidden truth that achieving alpha—outperforming the market benchmark—is more attainable on Main Street.
Achieve superior stock market returns by investing with lower costs and reduced risk, being cautious of overly complex research, and dismissing the myth of rocket science within the financial services industry.
Thank you for reading Quality Value Investing on Substack. I hope you find enjoyment and value in the newsletter, just as I find excitement in sharing the rewarding experience of applying the current wealth and present value principles and strategies in our pursuit of total return investment alpha over long-term holding periods.
Make sure to perform your due diligence and review the necessary disclosures at the end of the post.
In conjunction with the principles, strategies, and practices presented in the Quality Value Investing newsletter, free subscribers are encouraged to access the QVI Real-Time Stock Picks, supported by simplified research and analysis, by upgrading to a premium subscription that offers high-value at a low cost. Fully engage in the QVI community, today.
About the Writer
David J. Waldron is the contributing editor of Quality Value Investing, and the author of the international-selling book Build Wealth with Common Stocks: Market-Beating Strategies for the Individual Investor. David’s mission is to inspire his readers to achieve their financial goals and dreams. His work has been featured in Substack Finance, Seeking Alpha, MSN Money, TalkMarkets, ValueWalk, Yahoo Finance, QAV—Australia’s #1 Value Investing Podcast, Money Life with Chuck Jaffe, LifeBlood with George Grombacher, The Acquirer’s Multiple, Capital Employed, and on platforms like Amazon, Barnes & Noble, Apple Books, The BookLife Prize, and Publisher’s Weekly. David previously enjoyed a 25-year career as a postsecondary education executive. He earned a Bachelor of Science in Business Studies as a Garden State Scholar at Stockton University and completed The Practice of Management Program at Brown University.
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