His long-suffering wife, Emma, stands by him through thick and thin, despite the fact that her father, before his death, had to bail him out on many occasions and the fact his circumstances force her to pawn all her family heirlooms. The maxims she lives by are: "I will never desert Mr. Micawber!" and "Experientia does it (One learns by experience (literally, 'experience teaches'))".
He is famous for frequently asserting his faith that "something will turn up." His name has become synonymous with someone who lives in hopeful expectation. This has formed the basis for the Micawber Principle, based upon his observation:
"Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."If I extrapolated Wilkins Micawber into the today's investment world, I'd translated the Micawber Principle into:
"Annual performance better than the market, result happiness. Annual performance worse than the market, result misery."How many people hop from fund to fund (all high expense ratios, of course), searching for the next hot hand, hoping to ride some gunslinger's hot streak to riches, only to be disappointed in the end? How many people jump on Money Magazine or Kiplinger's funds or stocks for the next decade only to underperform the market dramatically? The experts know no more than the average joe.
Why make life complex? Market performance over the next 30 to 40 years will make the average investor rich beyond what they can image. Why chase the next great hope toward some imaginary pot of gold?
Take the easy road to riches. Do what experience teaches. Few funds over the long-run can beat the indexes, and the odds are against most people discovering those funds and sticking with them through thick and thin.
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