Welcome to the Self Directed
Investor. Our mission at the Self
Directed Investor is to provide original analysis, valuable information, timely
commentary, and useful educational material to help inform your personal
My name is Scott Nystrom — founding
partner, President, and Editor of this web site. I am also a self directed investor
with a 12 year average return of about 16 percent per year from 1997-2008.
Analyzing global financial markets, researching economic trends, developing investment strategies, and
performing due diligence on companies are among my favorite activities. One result of this interest is that I have been somewhat successful using an asset
concentration strategy with so-called “high
risk” investments. This approach was comfortable for me because of my “safe” investments — including my
education (Ph.D.), experiences (White House OMB and Capitol Hill), analytical skills,
love of markets, and a small defined benefit pension at age 62.
For the past 25 years, I have worked
in the public and private sectors as a policy analyst, economist, scholar,
professor, manager, and consultant in the Washington DC area. The issue areas I
have worked on include health care, taxes, budgeting, Social Security,
pensions, aging, energy, health diplomacy and international trade.
The reason these personal items are
mentioned is to impress upon you that every self directed investor possesses:
levels of risk tolerance; and,
endowments of human capital (the stock of skills, knowledge, and experiences
you possess to produce goods and services that consumers value in the
Yes, we are all different and that
means different approaches to investing are better suited for some people than
In short, we need to recognize one
investment approach may not work for other investors and there is no foolproof
recipe for making money in the markets. And not every investment, trade, or
strategy produces positive returns. But it is important to remember that there
are baseline financial concepts and information that can help to improve your
returns in the market.
In part, my losses in 2008 motivated
me to create this website. During this time, I was fortunate to be a member of the
ValueForum, a subscription-based online community of 1,300 self directed
investors with different gifts, talents, and viewpoints who share ideas with
ValueForum gave me two advantages
over most self directed investors. First, there is nothing like critical
feedback received in the open “marketplace
of ideas” for tempering our irrational biases about the economy, markets,
and companies. Second, the analysis offered by other experienced investors has helped
me to better understand what happened in 2008 and to develop strategies to
rebuild my investment portfolio.
Another motivation for this website
is to let investors know that you are not alone. You should know that global
wealth destruction during 2008 totaled at least $50 trillion according to the Asian Development Bank —
an amount equal to almost one year of worldwide economic output. This financial
tsunami hit a broad swath of investors around the globe from the super-rich to
the middle class.
The most stunning fact of 2008 is
that the smartest investment gurus who were supported by extraordinary
resources also lost huge shares of their wealth — including Warren Buffet who
reportedly lost almost 40 percent of his net worth in 2008.
As an educator, I am also motivated to
educate investors, share investment ideas, and promote financial literacy
across the generations.
We hope you will enjoy this
educational website and benefit from being exposed to valuable content, ideas,
and tools designed for self directed investors.
Remember, no one cares more about your
money than you do.
Scott V. Nystrom, PhD
Editor, Self Directed Investor