Posts filed under “Asset Allocation”
Now before I commit blasphemy, a few words: I am as close to being a Boglehead as you will find, without actually being one. The bulk of my portfolio is in passive indexes. Most of the assets I manage are in a broad allocation model.
This is a tribute to the wisdom and teachings of investing legend John Bogle, who founded Vanguard Group 40 years ago on the premise that matching market-based returns yielded better results for most investors than picking individual stocks, market-timing or any other investment strategy. During the past four decades, the sleepy firm Bogle started has turned into an investment giant, now managing about $3 trillion.
But we have learned many things during the intervening years. I don’t want to commit the sin of ignoring the accumulated quantitative evidence. There are certain mathematical truths in investing, and to pretend they don’t exist would harm my portfolio (and my clients).
Please understand that my deviation from Bogle’s philosophy isn’t due to hubris, but rather, mathematics. Certain facts of long-term investing have such strong evidence behind them that they are almost incontrovertible. It would be irresponsible for any investor, or their fiduciary, to ignore this evidence. Hence, I find myself at odds with someone I respect in four areas of portfolio management:
This chart tells us three things: 1) People are obviously doing something wrong very wrong with their investment dollars; 2) Attempts at generating Alpha end up costing most investors their Beta; 3) Irrationality, emotions, and cognitive errors are the underlying cause of this poor performance. Source: ValueWalk
> My Sunday Washington Post Business Section column is out. This morning, we look at why It’s time to market forecasters to admit the errors of their ways. It is yet another look at the parade of really bad forecasts we get treated to constantly in the world of investing and finance. Here’s an excerpt…Read More
Wow, that was quick! We have one or two slots left to meet with folks in Seattle during the week of January 20th (I am coming into town to interview Howard Marks at the CFA dinner). For those of you who are familiar with my investing philosophy, this is an opportunity for a more in…Read More
The week of January 20th, I will be in Seattle to interview Howard Marks at the CFA dinner. I will also be visiting a few clients and prospective clients in the area as well. Many of you are familiar with my investing philosophy, but this is an opportunity to have a more in depth and personal…Read More
For investors, it’s a perfect time to go back to the basics Barry Ritholtz Washington Post, December 21, 2014 Look around you: This is the time of year when the pages of newspapers and magazines are filled with predictions and lists and all manner of money-losing nonsense. I have pushed back against much…Read More
> My Sunday Washington Post Business Section column is out. This morning, we look at a few basics of investing that many investors get wrong. Here’s an excerpt from the column: “Today, I am going to suggest you take a different route: Focus on 10 basic, simple truths that many investors seemingly ignore. Some…Read More
Motivational speaker Anthony Robbins has a new book on investing, “Money: Master the Game.” It is his first book in two decades, and he has been everywhere, flogging it directly onto the best-seller list. The good news is that the book contains snippets of conversations with some of the world’s greatest investors. The bad news…Read More
> My Sunday Washington Post Business Section column is out. This morning, we take yet another at Tony Robbin’s All Weather Portfolio. The print version had the headline Why the all-weather portfolio is a wash-out while online, it was Better Than All Weather Portfolio. Rather than merely criticize Robbin’s 55% bond, 15% commodity portfolio, I…Read More