My simple approach to investing

Let me share my journey of recently deciding to convert all my stock holdings into VTI (Vanguard Total Stock Market ETF).

My Early Days of Stock Market Confusion

When I first entered the stock market, I treated it like a mobile casino open five days a week. I’d follow whatever people were hyping on Twitter and SeekingAlpha—the more likes, the more credible it seemed, right? I’d buy whatever they recommended. The results were predictable: I lost big time. My most vivid memory was during grad school when I lost all the tuition money my dad had given me (luckily I got a teaching assistantship that covered my tuition). I bought stocks recklessly. I bought cannabis stocks, sports betting stocks, Facebook at $56 (but sold at $73, now it’s $600), and even stocks that eventually dropped 99.9%. To date, I’ve lost over $100,000, learning painful lessons along the way.

Time to Fire the Incompetent “Me”!

The book “The Simple Path to Wealth” completely transformed my understanding of investing. It taught me a crucial principle: Keep it simple—complex investment products don’t necessarily yield better returns, and the simpler the investment strategy, the better. For instance, those complex whole life insurance products banks push are mainly designed to collect hefty fees, while they take your money and buy cheap index funds to pocket the difference. Low-fee broad market index funds like VTI, with an expense ratio of just 0.03%, are the simplest and most effective investment choice.

Although I read this book in 2017 and used my slowly accumulated work savings to buy VTI and individual tech stocks, during the pandemic I got greedy thinking I could time the market and re-enter after a crash, so I converted all my holdings to cash. Every day I’d shout to my roommate, “It’s crashing!” And then… nothing. VTI skyrocketed, and I missed the entire rally. I kept waiting for the perfect entry point that never came—when it rose, I thought it was too high; when it dipped, I thought it hadn’t hit bottom yet. Classic foolish retail investor behavior. It wasn’t until March last year, when I re-read “Just Keep Buying,” that I finally started dollar-cost averaging into VTI. While I found that book drier than “The Simple Path to Wealth,” what stuck with me was the author’s point that being good at stock picking is unprovable. “Why should we do something like picking individual stocks when we can’t prove we’re good at it?” Exactly! Only a tiny minority can beat the market, and some might outperform for 10 or 20 years only to lose everything in year 30—that’s useless. Plus, constantly researching the market, looking for patterns, is like trying to find Orion’s Belt in stock charts.

When my stocks went up, it was just luck or because the whole market was rising—nothing to be proud of. On the contrary, I’ve made countless stupid decisions. If “I” were the CEO of my personal company, I’d have been fired long ago! Why should I entrust such important decisions about investing our hard-earned money to someone who’s terrible at stock picking—namely, “me”? So, I need to remove “myself” from the investment equation. I need to fire “me”!

Rethinking My Investment Philosophy and Values

Recently, while teaching my mom how to invest in stocks (spoiler: just buy index funds), I took the opportunity to reorganize and reflect on my investment philosophy and values:

1. Own just one fund: Avoid choice paralysis and rebalancing issues
2. Never check stock apps: Avoid emotional swings and focus time and energy on more important things
3. Automated investing: Remove human emotions from the equation, eliminate “me” from the process
4. Long-term holding: Investment horizon of at least 30 years
5. Simplicity over performance: Pursue the simplest, most brain-dead investment approach
6. Peace of mind: Give up exciting futures and leverage, pursue calm investing mindset

Simply put, I’m pursuing investment minimalism and decluttering.

Why VTI?

Choosing this one fund is as difficult as choosing a life partner. Very few options meet all these criteria. VTI, VOO, and VT were my top choices. Here’s why I chose VTI:

• Capitalism’s advantage: In today’s peculiar society that only pursues GDP and profits, most public companies will continue growing
• Diversification: Eggs in multiple baskets—if AAPL or META fails, the impact on me is minimal
• Self-cleansing: Automatically removes underperforming companies, invests in new IPOs, and rebalances by market cap
• American advantage: U.S. companies have penetrated every country and enjoy first-mover advantage
• I’m greedy: The U.S. market has performed so much better than international markets over the past decade, I just can’t bring myself to buy VT

So VTI, I choose you! Here’s to the next thirty years together! よろしくお願いしますね！(Please take care of me!)

Conclusion

I liquidated all my other stocks and converted everything to VTI. Clean, simple, refreshing. Although VTI is at all-time highs now, since the market rises most of the time, VTI is at all-time highs most of the time—it doesn’t matter at all. And it’s no longer my decision when or whether to buy. My broker will purchase $X worth of VTI every Wednesday, rain or shine.

After making this decision, I feel a sense of relief—I’ll never have to worry about stock investment decisions again. While I often think “I wish I had understood this principle over a decade ago,” or had done this when I first read “The Simple Path to Wealth,” which would have saved me a lot of tuition, some wisdom is hard to implement just from reading books—you really need firsthand experience to truly understand. Now I’ve finally found the investment approach that suits me best—simply holding VTI and maintaining regular investments. I’ve finally embarked on The Simple Path to Wealth. This is probably my final answer. I hope? VTI won’t crash 30% tomorrow, right?