The Speculation Blues
Lyrics by Mark T. Hebner
©2011 IFA Publishing, Inc.
Written on May 28, 2006

The lure of fast money
makes you think active
But the record proves
you're better off Passive

Professors came to
a shocking conclusion
The active advantage
was just an illusion

The stock market gamble
can be an addiction
You'll search, but won't find
that winnin' prediction

Traders devour the news
like a school of piranha
While the passive find peace
in a tradeless nirvana

The bets laid down
on predictin' that news
Will surely bring on
the Speculation Blues

All them scholars toilin'
at the Universities
Uncovered the fact that risk
was just probabilities

They said that investors
should diversify
And tell their stock brokers
"good luck and goodbye"

Traders oughta learn
from Nobel Laureates
But they keep on makin'
them long and short bets

Once you get the efficient
market hypothesis
You’ll no longer be fooled
by market randomness

Stockaholics search
for the best stock to choose
but end up cryin'
the Speculation Blues

Instead of Morgan or Cramer
Barney or Lynch
You're better off with Bogle
Fama or French

The wisdom of crowds
throughout the land
Will act like the force
of the invisible hand

Everyone knows
there ain't no free lunch
But the pickers keep thinkin'
they can win from a hunch

Your broker's out buyin'
himself a fine yacht
And you're gettin' nothin'
from the stocks that he bought

Stock gamblin' can be
like drinkin' that booze
Leavin' you singin'
the Speculation Blues

Market timers dream
of makin' a killin' on a trend
But buyin' and holdin'
wins out in the end

Fund managers trade
as though taxes don't matter
But tradin' too much
just makes Uncle Sam fatter

Silent partners are havin' a feast
On most investors
But they suck the least
From savvy indexers

Traders think that money
grows from speculation
But indexers know
it's just risk compensation

Trades placed online
just guessin' tomorrows news
givin those gamblers
the Speculation Blues

So before investing
your hard earned green
Catch a good vibe
for the variance and the mean

The smart money man
is best served
By checkin' out
how the bell is curved

For when it's skinny
and the average is high
The trader can’t beat it
no matter how he try

A risk taker gots'ta know
his risk capacity
Then hang on for his payout
with true tenacity

While the passive relax
on a tropical cruise
The active are singin'
the Speculation Blues

 
Speculation Blues

©2005 - 2011 Index Funds Advisors, Inc. All rights reserved. www.ifa.com

This site is for the use of clients and potential clients of Index Funds Advisors, Inc. and the IFA Network Members. It is not to be used by any other investment advisor or investment professional as an information/marketing materials source, asset allocator, risk capacity or risk tolerance assessment, or for any other purpose. The right to download, store and/or output any material on this internet site, or the Index Funds: The 12-Step Program for Active Investors eBook, is granted for viewing use only and this grant only applies to clients and potential clients of Index Funds Advisors, Inc. and the IFA Network Members. Reproduction or editing by any means, mechanical or electronic, in whole or in part, without the express written permission of Index Funds Advisors, Inc. is strictly prohibited and subject to prosecution under U.S. and International copyright and trademark laws.

DISCLAIMER: THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION POSTED ON THIS OR ANY LINKED INTERNET SITE. Your use of this site is acknowledgment that you have read and understood the full disclaimer.

WARNING: Past performance does not guarantee future results. Investment returns and principal value will fluctuate, so that investors' shares, when sold, may be worth more or less than their original cost. Investing in any mutual fund, index or actively managed, does not guarantee that an investor will make money, avoid losing capital, or indicate that the investment is risk-free. Actively managed funds sometimes outperform index funds. You just don't know in advance which actively managed fund will outperform the appropriate index. Just because a mutual fund is an index mutual fund, it does not guarantee a performance superior to an actively managed mutual fund. There are no absolute guarantees in investing. When reviewing any backtested performance information on this internet site, please read the Disclosure for Backtested Performance Information (click here to read the Disclosure for Backtested Performance Information.)