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Jack Falvey's Investor Education Briefs: Sticking to the basics of finance is a safe strategy

July 16. 2017 11:26PM

The financial section of the Wall Street Journal can be read for mastery. Some do this. Everyone else must at least attempt financial literacy.

If you are not blessed with a great financial mind, all that is required is that you follow the lead of those who have dedicated their lives to this art form. Saving and then spending what is left is far different than spending and then saving what is left.

Allocating assets to a mix of investment opportunities allows for the bumps in the financial road. All these fundamentals can be easily understood. Doing them is far more difficult than one would think.

When the economy is growing, hang on and enjoy the ride. When the economy takes a dip, hang on and survive the ride. How the ride works is debated by those in the engine room in such detail that they can only be understood by each other.

Our understanding of electricity is far from complete, but we flip the switch and enjoy its benefits at sundown each day. It is only when the grid goes down that we realize there is a grid and others have worked all day to make it work for us.

Don’t pick up downed wires, don’t overload circuits, and be sure the lamp is off when you change a light bulb are the kinds of things you need to know for personal safety. Ohm’s law may be of interest, but not required.

Check your basics with someone in the business, then go back to the business you know the most about and help others in your field learn their basics.

Sticking to the basics that you understand is a safe strategy. Finance 101 is what you must understand. Ph.D.s are not required.

Jack Falvey is a frequent contributor to the Union Leader, Barron’s and The Wall Street Journal. He can be contacted at


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