Warren Buffet said, "Diversification makes very little sense for anyone that knows what they’re doing." He also said, "Diversification is a protection against ignorance..." Most of us need that protection against ignorance, yet diversification often makes us feel bad when some of our holdings don't do as well as others. We make the case why we should diversify anyway. Topics covered include: Warren Buffet says it's crazy to own more than 30 stocks, but Berkshire Hathaway owns 48 … [Read more...]
340 Plus: Asset Allocation Assumption Update, Ponzi Schemes, and Hiring Investment Advisors
In Plus Episode 340, we review the semiannual expected return and risk update for stocks, income strategies and bonds. We review new tools available for analyzing the model portfolios. We answer a member's question on how to avoid Ponzi schemes and discuss what to consider when hiring investment advisors including hedge fund strategies. … [Read more...]
337: Why in the World Would You Own Bonds?
With interest rates rising does it still make sense to own bonds? Yes. This episode explores the role of bonds including why they are more effective at hedging stock losses than protective put options. Topics covered include: David's business and investment philosophy How bond funds have performed in 2021 Three disparate views on the direction of interest rates from Capital Economics, Ray Dalio, and Hoisington Investment Management Company How to invest in China … [Read more...]
318 Plus: How to Select and Implement a New Portfolio Mix
In Plus episode 318, we briefly discuss the purpose behind adding 16 new video lessons to the site in 2020. We also share the audio for a new video lesson on portfolio implementation including a discussion on categorizing existing portfolios, asset location between taxable and tax-deferred accounts, selling taxable assets and the timing of portfolio transitions. … [Read more...]
313: No One Is Entirely a Buy and Hold Investor
What are the numerous decisions individuals have to make in managing their investment portfolios. Topics covered include: Why individual investors should invest like family offices and university endowments in order to build and preserve wealthWhy even buy and hold investors make portfolio changesWhat are examples of the numerous decisions individuals have to make in overseeing their investment portfoliosHow badly have value stocks underperformed growth stocksHow our mindset should … [Read more...]
306: Three Approaches to Asset Allocation
What are the three primary ways to allocate assets and build a portfolio when saving for retirement or living in retirement. Topics covered include How saving for retirement and living in retirement differ. What are the expected return and risk of the Permanent, Golden Butterfly, and All Season portfolios. What are the pros and cons of a role-based permanent portfolio. What are the pros and cons of a strategic portfolio mix, such as the Bogleheads Three Fund Portfolio What … [Read more...]
297 Plus: May 2020 Investment Conditions and Portfolio Review
In Plus episode 297 for the week of May 8, 2020, we review the latest economic trends, market valuations and market internals. We review the intrinsic value of stocks, why they historically have declined during recessions and why stocks may be acting differently during the current global recession. Finally, we review the criteria for when the allocation to stocks would be increased in the Money For the Rest of Us Plus model portfolios. … [Read more...]
275: Are You Over Diversified?
Is it possible to be too diversified in your investment portfolio and how can you tell? Why Warren Buffet thinks diversification is protection against ignorance. In this podcast episode you’ll learn: The skills you need to be able to select individual stocks.How have active managers outperformed relative to passive indexing products.How much diversification is too much and a test to determine if one is over diversified.What is factor investing and which factors have worked over … [Read more...]
274: 10 Questions to Master Successful Investing
What are the timeless principles we can follow in order to become better investors? In this podcast episode you’ll learn: How a book's permanence makes it different from a podcast. How David's book got written and published and why his publisher just recalled the hardcover version of the book. What are the 10 questions we should answer before we invest in anything. Show Notes Money for the Rest of Us book Thinking in Bets: Making Smarter Decisions When You Don't … [Read more...]
229: Stop Maximizing Your Returns Using Modern Portfolio Theory
Why modern portfolio theory is a defective way to build out an investment portfolio. This episode explains a better approach to asset allocation. In this episode you’ll learn: What are the inputs needed to compile an asset allocation using modern portfolio theory.What are the defects with modern portfolio theory.Why we should be minimizing our maximum regret rather than maximizing our returns.A more flexible approach to asset allocation that isn't reliant on modern … [Read more...]
