Baking and Investing Have Much in Common

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Rick Ferri
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Baking and Investing Have Much in Common

Postby Rick Ferri » Thu Jan 31, 2013 9:40 am

Managing a successful investment portfolio is like baking a State Fair award-winning cake. They both require high-quality ingredients, mixed in the right amounts, and discipline when baking. Decorating is important too, although no amount of frosting will cover-up marginal ingredients or careless baking.

Investing Well is Like Baking an Award-Winning Cake

This article is an introduction to low-cost index fund investing.

Rick Ferri
Choose a few low-cost index funds in different asset classes, rebalance occasionally and forgetaboutit!

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bertilak
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Re: Baking and Investing Have Much in Common

Postby bertilak » Thu Jan 31, 2013 12:06 pm

Rick Ferri wrote:Managing a successful investment portfolio is like baking a State Fair award-winning cake.

    Just don't leave the cake out in the rain!
    I don't think that I could take it
    'Cause it took so long to bake it
    And I'll never have that recipe again!

    (With apologies to Richard Harris)
OK, I don't know what that means but it is the first thing that popped into my head when I read your post.
I have a strong moral sense - by my standards. | -- Rex Stout

Fallible
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Re: Baking and Investing Have Much in Common

Postby Fallible » Thu Jan 31, 2013 12:47 pm

Rick Ferri wrote:Managing a successful investment portfolio is like baking a State Fair award-winning cake. They both require high-quality ingredients, mixed in the right amounts, and discipline when baking. Decorating is important too, although no amount of frosting will cover-up marginal ingredients or careless baking.

Investing Well is Like Baking an Award-Winning Cake

This article is an introduction to low-cost index fund investing.

Rick Ferri


A good and fun introduction for those new to indexing and one to recommend when newbies appear on the forum looking for help. BTW, last time I saw a food analogy in investing was Bill Schultheis's pumpkin pie in "The Coffeehouse Investor." It was a reason I found the book so much fun to read all the while I was learning.

retiredjg
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Re: Baking and Investing Have Much in Common

Postby retiredjg » Thu Jan 31, 2013 12:56 pm

I like it Rick!

I frequently use a "cake" and "icing" analogy myself, but I never thought of several other similarities that you mentioned. My favorite is "....an unwillingness to let time do its magic...." It's true. Your cake won't be any good if you don't cook it long enough. Or open the oven door every 2 minutes to see how it is doing. :D

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bertilak
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Re: Baking and Investing Have Much in Common

Postby bertilak » Thu Jan 31, 2013 1:02 pm

I like this one:
There are many more cake decorators than there are quality bakers among the thousands of registered advisers.
I have a strong moral sense - by my standards. | -- Rex Stout


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