Money and Finance
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Related book: Investment Mistakes Even Smart Investors Make and How to Avoid Them
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An old post worth reviewing: Warren Buffett on Diversification - 1966 I was reminded of Buffett's thoughts as I was once again thinking about optimal portfolio size for the "know something" investor. If you can consistently find ideas where...
- What's Your Weight?
No I'm not asking you to divulge your body weight, although if that will help you with any weight loss goals you have feel free to do so. The weight I'm referring to has to do with your portfolio. I think we all understand the importance of...
- Portfolio Returns - Part I
I figured that we should take a look at portfolio returns so we can see exactly where we stand. If you don't know what you're actually returning then it's hard to tell if it's a good investment. While some people are focused on just...
- Espp
Well my ESPP shares officially hit my brokerage account today. I was able to get 184.524 shares at $29.33, which is the 15% off of the $34.51 close. Since it transferred to my brokerage account I'll be able to go through with my plan to sell call...
- Investing Lessons From David Einhorn
I recently finished reading David Einhorn's Fooling Some of the People All of the Time, which is primarily focused on his hedge fund's (Greenlight Capital) take down of Allied Capital. The Allied Capital case study is a must-read in itself, as...
Money and Finance
NYT: Taking a Chance on the Larry Portfolio
Found via @tferriss.
There are so many competing philosophies in the world of investing that most people learn to tune out any conversations on the topic.
This turns out to be a pretty good instinct. After all, people consistently brag about their winning bets without disclosing their losers. They also tend to obsess over whatever’s happened in the markets most recently, assuming things will be that way forever.
But the one thing that we all ought to be able to agree on is this: The point of any long-term portfolio for the vast majority of investors is to earn whatever return you need to meet your goals while taking the least amount of risk.
I recalled this first principle of investing when I heard about something called the Larry Portfolio earlier this year.
Named for Larry Swedroe, the director of research and a principal at BAM, a wealth management firm in Clayton, Mo., the portfolio tracks indexes that achieved nearly the same 10 percent annual return between 1970 and 2010 as a portfolio invested entirely in the Standard & Poor’s 500-stock index. And here’s the Larry Portfolio’s trick: It did so with less than a third of its money in stocks, with the rest in one-year Treasury bills.
So how does it work?
There are so many competing philosophies in the world of investing that most people learn to tune out any conversations on the topic.
This turns out to be a pretty good instinct. After all, people consistently brag about their winning bets without disclosing their losers. They also tend to obsess over whatever’s happened in the markets most recently, assuming things will be that way forever.
But the one thing that we all ought to be able to agree on is this: The point of any long-term portfolio for the vast majority of investors is to earn whatever return you need to meet your goals while taking the least amount of risk.
I recalled this first principle of investing when I heard about something called the Larry Portfolio earlier this year.
Named for Larry Swedroe, the director of research and a principal at BAM, a wealth management firm in Clayton, Mo., the portfolio tracks indexes that achieved nearly the same 10 percent annual return between 1970 and 2010 as a portfolio invested entirely in the Standard & Poor’s 500-stock index. And here’s the Larry Portfolio’s trick: It did so with less than a third of its money in stocks, with the rest in one-year Treasury bills.
So how does it work?
....................
Related book: Investment Mistakes Even Smart Investors Make and How to Avoid Them
- A Quick Diversification Thought...
An old post worth reviewing: Warren Buffett on Diversification - 1966 I was reminded of Buffett's thoughts as I was once again thinking about optimal portfolio size for the "know something" investor. If you can consistently find ideas where...
- What's Your Weight?
No I'm not asking you to divulge your body weight, although if that will help you with any weight loss goals you have feel free to do so. The weight I'm referring to has to do with your portfolio. I think we all understand the importance of...
- Portfolio Returns - Part I
I figured that we should take a look at portfolio returns so we can see exactly where we stand. If you don't know what you're actually returning then it's hard to tell if it's a good investment. While some people are focused on just...
- Espp
Well my ESPP shares officially hit my brokerage account today. I was able to get 184.524 shares at $29.33, which is the 15% off of the $34.51 close. Since it transferred to my brokerage account I'll be able to go through with my plan to sell call...
- Investing Lessons From David Einhorn
I recently finished reading David Einhorn's Fooling Some of the People All of the Time, which is primarily focused on his hedge fund's (Greenlight Capital) take down of Allied Capital. The Allied Capital case study is a must-read in itself, as...