Diversified Portfolio Quotes

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It’s not possible for investors to consistently outperform the market. Therefore you’re best served investing in a diversified portfolio of low-cost index funds [or exchange-traded funds].
Charles T. Munger
Permaculture Capital Stewardship, or Permaculture Investing, is about not just having a diversified portfolio, but having a portfolio where all of the assets within the portfolio have synergy and whereby that synergy is channeled toward maximized productivity for both shareholders and stakeholders. A permaculture investment portfolio has a multiplicative value effect.
Hendrith Vanlon Smith Jr.
The rise and fall of Teresa Cornelys proves three things: that the wages of sin are high, that you should “just say no” to opera, and that it’s always wise to diversify your investment portfolio.
Ben Aaronovitch (Moon Over Soho (Rivers of London #2))
The best long-term results come from buying a big, well-diversified portfolio of financial securities, and trading as little as possible.
Robin Wigglesworth (Trillions: How a Band of Wall Street Renegades Invented the Index Fund and Changed Finance Forever)
life is not a portfolio: not for a startup founder, and not for any individual. An entrepreneur cannot “diversify” herself: you cannot run dozens of companies at the same time and then hope that one of them works out well. Less obvious but just as important, an individual cannot diversify his own life by keeping dozens of equally possible careers in ready reserve.
Peter Thiel (Zero to One: Notes on Startups, or How to Build the Future)
It inspired me to diversify my portfolio of attachments, so to speak, partly so I wouldn't overwhelm any one person with the fire hose of my 'undelivered discourse,' but also to protect myself from leaning to heavily on a buttress that couldn't and shouldn't sustain my full weight.
Kate Bolick (Spinster: Making a Life of One's Own)
Similarly, the buy-and-hold investor who prudently holds a diversified portfolio of low-cost index funds through thick and thin is the investor most likely to achieve her long-term investment goals.
Burton G. Malkiel (The Elements of Investing: Easy Lessons for Every Investor)
The index fund is a most unlikely hero for the typical investor. It is no more (nor less) than a broadly diversified portfolio, typically run at rock-bottom costs, without the putative benefit of a brilliant, resourceful, and highly skilled portfolio manager. The index fund simply buys and holds the securities in a particular index, in proportion to their weight in the index. The concept is simplicity writ large.
John C. Bogle (Common Sense on Mutual Funds, Updated 10th Anniversary Edition)
Investment Owner’s Contract I, _____________ ___________________, hereby state that I am an investor who is seeking to accumulate wealth for many years into the future. I know that there will be many times when I will be tempted to invest in stocks or bonds because they have gone (or “are going”) up in price, and other times when I will be tempted to sell my investments because they have gone (or “are going”) down. I hereby declare my refusal to let a herd of strangers make my financial decisions for me. I further make a solemn commitment never to invest because the stock market has gone up, and never to sell because it has gone down. Instead, I will invest $______.00 per month, every month, through an automatic investment plan or “dollar-cost averaging program,” into the following mutual fund(s) or diversified portfolio(s): _________________________________, _________________________________, _________________________________. I will also invest additional amounts whenever I can afford to spare the cash (and can afford to lose it in the short run). I hereby declare that I will hold each of these investments continually through at least the following date (which must be a minimum of 10 years after the date of this contact): _________________ _____, 20__. The only exceptions allowed under the terms of this contract are a sudden, pressing need for cash, like a health-care emergency or the loss of my job, or a planned expenditure like a housing down payment or a tuition bill. I am, by signing below, stating my intention not only to abide by the terms of this contract, but to re-read this document whenever I am tempted to sell any of my investments. This contract is valid only when signed by at least one witness, and must be kept in a safe place that is easily accessible for future reference.
Benjamin Graham (The Intelligent Investor)
I’m not going to worry about losing one friend if I have a hundred, but if I have two friends I’m really going to be worried. I’m not going to worry about losing my job because my one boss is going to fire me, because I have thousands of bosses at newspapers everywhere. One of the ways to not worry about stress is to eliminate it. I don’t worry about my stock picks because I have a diversified portfolio. Diversification works in almost every area of your life to reduce your stress.
Timothy Ferriss (Tools of Titans: The Tactics, Routines, and Habits of Billionaires, Icons, and World-Class Performers)
Whenever anyone asks me for investment advice, I tell them to buy a diversified portfolio heavily tilted toward stocks, especially if they are young, and then scrupulously avoid reading anything in the newspaper aside from the sports section. Crossword puzzles are acceptable, but watching cable financial news networks is strictly forbidden.#
Richard H. Thaler (Misbehaving: The Making of Behavioral Economics)
It is a common misconception that if you diversify, you don’t need to learn anything. Just buy a bunch of stocks, and you will be good. Nothing can be further from the truth.
Naved Abdali
That looks bad. Your ear is as red as a boiled lobster. I guess the Toutain’s have diversified their portfolio of geeks to pick on this year. That’s wise considering the geekonomic times we’re living in now.
Joel T. McGrath (Shrouded Secrets (Shrouded Secrets Chronicles, #1))
You want your diversified stock portfolio to include stocks from different industries, large companies, small companies, companies here in the United States, foreign companies, new companies, and old companies.
Suze Orman (The Money Book for the Young, Fabulous & Broke)
If you buy an S&P 500 index fund, your investment is highly diversified and its performance will match that of 500 leading U.S. corporations' stocks. Is it possible to lose all of your money? Yes, but the odds of that happening are slim and none. If 500 leading U.S. corporations all have their stock prices plummet to zero, the value of your investment portfolio will be the least of your problems. An economic collapse of that magnitude would make the Great Depression look like Lifestyles of the Rich and Famous.
Taylor Larimore (The Bogleheads' Guide to Investing)
The economic system pressures me to expand and diversify my investment portfolio, but it gives me zero incentive to expand and diversify my compassion. So I strive to understand the mysteries of the stock exchange while making far less effort to understand the deep causes of suffering.
Yuval Noah Harari (21 Lessons for the 21st Century)
The idea of diversification makes sense to a point - if you don't know what you're doing. If you want the standard result and don't want to end up embarrassed - then of course, you should widely diversify. But nobody is entitled to a lot of money for holding this view. It's like knowing 2 plus 2 is 4. Any idiot can diversify a portfolio.
Charles T. Munger
Being forced to quit forces you to start exploring new options and opportunities. But you should start exploring before you’re forced to. Even after you have found a path that you want to stick to, keep doing some exploration. Things change, and whatever you are doing now may not be the best path for you to pursue in the future. Having more options gives you something to switch to when the time is right. Exploration helps you to diversify your portfolio of skills, interests, and opportunities. A diversified portfolio helps to protect you against uncertainty. Backup plans are good to have especially because some backup plans can turn out to be better than what we’re already pursuing.
Annie Duke (Quit: The Power of Knowing When to Walk Away)
We are researching and developing human abilities mainly according to the immediate needs of the economic and political system, rather than according to our own long-term needs as conscious beings. My boss wants me to answer emails as quickly as possible, but he has little interest in my ability to taste and appreciate the food I am eating. Consequently, I check my emails even during meals, which means I lose the ability to pay attention to my own sensations. The economic system pressures me to expand and diversify my investment portfolio, but it gives me zero incentive to expand and diversify my compassion. So I strive to understand the mysteries of the stock exchange while making far less effort to understand the deep causes of suffering.
Yuval Noah Harari (21 Lessons for the 21st Century)
What’s going on there?” THAT’S JUST SOME REAL ESTATE DEALS I’M WORKING ON. “Real estate?” I HAVE A LIFE OUTSIDE OF THIS COMPANY, YOU KNOW. “More than I do,” I said. “Is … that legal? Owning real estate?” YOU MEAN, BECAUSE I’M A CAT? “Well, yes.” I HAVE A TRUST SET UP FOR MY BENEFIT AND A HUMAN LAWYER THAT ACTS AS THE EXECUTOR. I TELL HIM WHAT TO DO, HE DOES IT. “Does he know you’re a cat?” YOU KNOW, IT’S NEVER COME UP. “So, you’re a real estate maven.” I HAVE A DIVERSIFIED PORTFOLIO, Hera wrote. MOSTLY BORING BUT SOME EXCITING PARTS. I DO A LOT OF INVESTING IN EMERGING MARKETS. “Sounds risky.” I’M A CAT, I CAN HANDLE RISK. WORST-CASE SCENARIO IS I LOSE EVERYTHING AND I STILL GET FED AND HAVE A PLACE TO NAP. “That’s … a surprisingly chill way of thinking about things.” SOMETIMES IT’S BETTER NOT TO BE A HUMAN, CHARLIE.
John Scalzi (Starter Villain)
On Diversification for Stress Management The below came from me asking, “What advice would you give your 30-year-old self?”: “My 30-year-old self wouldn’t have access to medical marijuana, so I’d have a limited canvas with which to paint. I’ve always made it a top priority since I was a teenager—and had tons of stress-related medical problems—to make that job one: to learn how to not have stress. I would consider myself a world champion at avoiding stress at this point in dozens of different ways. A lot of it is just how you look at the world, but most of it is really the process of diversification. I’m not going to worry about losing one friend if I have a hundred, but if I have two friends I’m really going to be worried. I’m not going to worry about losing my job because my one boss is going to fire me, because I have thousands of bosses at newspapers everywhere. One of the ways to not worry about stress is to eliminate it. I don’t worry about my stock picks because I have a diversified portfolio. Diversification works in almost every area of your life to reduce your stress.
Timothy Ferriss (Tools of Titans: The Tactics, Routines, and Habits of Billionaires, Icons, and World-Class Performers)
The 12 Principles of Permaculture Investing are: 1. Accumulate & Compound Capital: Consistently save and invest to grow your capital base over time, leveraging the power of compound interest. 2. Utilize Capital: Actively deploy your capital into productive investments that generate returns, rather than letting it sit idle. 3. Retain Maximum & Gradiented Liquidity: Maintain a balance between liquid assets (easily accessible cash) and less liquid investments, ensuring you can meet immediate needs while still investing for the long term. 4. Actively Manage Passive: While focusing on passive income sources, actively monitor and adjust your investments to optimize returns and mitigate risks. 5. Prioritize Long-Term Growth: Focus on investments that offer potential for significant growth over the long term, even if they don't provide immediate high yields. 6. Prioritize Consistent Yields: Balance your portfolio with investments that provide reliable, consistent income to support your financial needs. 7. Add Net Value to all Stakeholders: Invest in ways that benefit not only yourself but also the broader community, environment, and all parties involved. 8. Provide Authentic Data: Be transparent and honest in your financial reporting, providing accurate information to all stakeholders. 9. Collect & Utilize Authentic Data: Base your investment decisions on reliable, verified data rather than speculation or rumors. 10. Diversify Holistically: Diversify your investments across different asset classes, industries, and geographical regions to reduce risk and maximize potential returns. 11. Harvest Yields Equitably: Distribute profits fairly among all stakeholders, ensuring everyone benefits from the investment's success. 12. Reinvest Yields in Most Profitable Assets: Continuously evaluate your portfolio and reinvest profits into the most promising opportunities to further compound your growth.
Hendrith Vanlon Smith Jr.
Unconventional Success: A Fundamental Approach to Personal Investment recommends that investors engage not-for-profit fund management companies to create broadly diversified, passively managed portfolios. Note that most mutual-fund assets rest under the control of for-profit management companies. Not-for-profits represent a contrarian alternative. Note that most individuals’ portfolios contain result-dominating allocations to domestic marketable securities. True diversification represents a contrarian alternative. Note that most mutual funds attempt to beat the market. Market-mimicking strategies represent a contrarian alternative.
David F. Swensen (Unconventional Success: A Fundamental Approach to Personal Investment)
Does the portfolio have an appropriate mix of businesses that offer short-term growth and long-term growth? Are there enough cash-generating businesses to fund growth businesses? Is the portfolio sensibly diversified in terms of business risk?
Hetal Shah (Guide to the C-Suite of Fast-growing Companies)
Pro-risk, aggressive investors, for example, should be expected to make more than the index in good times and lose more in bad times. This is where beta comes in. By the word beta, theory means relative volatility, or the relative responsiveness of the portfolio return to the market return. A portfolio with a beta above 1 is expected to be more volatile than the reference market, and a beta below 1 means it’ll be less volatile. Multiply the market return by the beta and you’ll get the return that a given portfolio should be expected to achieve, omitting nonsystematic sources of risk. If the market is up 15 percent, a portfolio with a beta of 1.2 should return 18 percent (plus or minus alpha). Theory looks at this information and says the increased return is explained by the increase in beta, or systematic risk. It also says returns don’t increase to compensate for risk other than systematic risk. Why don’t they? According to theory, the risk that markets compensate for is the risk that is intrinsic and inescapable in investing: systematic or “non-diversifiable” risk. The rest of risk comes from decisions to hold individual stocks: non-systematic risk. Since that risk can be eliminated by diversifying, why should investors be compensated with additional return for bearing it? According to theory, then, the formula for explaining portfolio performance (y) is as follows: y = α + βx Here α is the symbol for alpha, β stands for beta, and x is the return of the market. The market-related return of the portfolio is equal to its beta times the market return, and alpha (skill-related return) is added to arrive at the total return (of course, theory says there’s no such thing as alpha). Although I dismiss the identity between risk and volatility, I insist on considering a portfolio’s return in the light of its overall riskiness, as discussed earlier. A manager who earned 18 percent with a risky portfolio isn’t necessarily superior to one who earned 15 percent with a lower-risk portfolio. Risk-adjusted return holds the key, even though—since risk other than volatility can’t be quantified—I feel it is best assessed judgmentally, not calculated scientifically.
Howard Marks (The Most Important Thing: Uncommon Sense for the Thoughtful Investor (Columbia Business School Publishing))
Over the last two decades, unconventional oil and natural gas wells have emerged as the dominant source of energy production in the United States. Despite the complexity of drilling these wells and forecasting production volumes, investors in such assets can take advantage of several mathematical principles to reduce the risk in their portfolios. This article dives into the practical application of the Central Limit Theorem and Law of Large Numbers within the energy sector and explores how the characteristics of unconventional reservoirs and diversified assets can work together to reduce production volatility for investors.
Oil & Gas Moneyball: Why Statistical Independence is Beneficial
Real estate investment expert, Sief Khafagi is changing the game with short-term rentals. A former techie who worked at Facebook for five years building the second-largest engineering organization across the world, Sief is currently the Co-Founder and CEO of Techvestor. He and his team have helped thousands of investors diversify their portfolios to add real estate and benefit from the success of short-term rental investments. He led the company in building its proprietary sourcing technology.
Sief Khafagi
The most significant benefit of a diversified portfolio is psychological stability when you need it the most.
Naved Abdali
If you want to be influential, diversify your portfolio by elevating your content across digital platforms building your brand by focusing on innovation, fan engagement and audience development.
Germany Kent
In Money: Master the Game, Ray Dalio elaborated for Tony: “When people think they’ve got a balanced portfolio, stocks are three times more volatile than bonds. So when you’re 50/50, you’re really 90/10. You really are massively at risk, and that’s why when the markets go down, you get eaten alive. . . . Whatever asset class you invest in, I promise you, in your lifetime, it will drop no less than 50% and more likely 70% at some point. That is why you absolutely must diversify.
Timothy Ferriss (Tools of Titans: The Tactics, Routines, and Habits of Billionaires, Icons, and World-Class Performers)
Simons’s team appeared to have discovered something of a holy grail in investing: enormous returns from a diversified portfolio generating relatively little volatility and correlation to the overall market. In the past, a few others had developed investment vehicles with similar characteristics. They usually had puny portfolios, however. No one had achieved what Simons and his team had—a portfolio as big as $5 billion delivering this kind of astonishing performance.
Gregory Zuckerman (The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution)
_____________ ___________________, hereby state that I am an investor who is seeking to accumulate wealth for many years into the future. I know that there will be many times when I will be tempted to invest in stocks or bonds because they have gone (or “are going”) up in price, and other times when I will be tempted to sell my investments because they have gone (or “are going”) down. I hereby declare my refusal to let a herd of strangers make my financial decisions for me. I further make a solemn commitment never to invest because the stock market has gone up, and never to sell because it has gone down. Instead, I will invest $______.00 per month, every month, through an automatic investment plan or “dollar-cost averaging program,” into the following mutual fund(s) or diversified portfolio(s): _________________________________, _________________________________, _________________________________. I will also invest additional amounts whenever I can afford to spare the cash (and can afford to lose it in the short run). I hereby declare that I will hold each of these investments continually through at least the following date (which must be a minimum of 10 years after the date of this contact): _________________ _____, 20__. The only exceptions allowed under the terms of this contract are a sudden, pressing need for cash, like a health-care emergency or the loss of my job, or a planned expenditure like a housing down payment or a tuition bill. I am, by signing below, stating my intention not only to abide by the terms of this contract, but to re-read this document whenever I am tempted to sell any of my investments. This contract is valid only when signed by at least one witness, and must be kept in a safe place that is easily accessible for future reference.
Benjamin Graham (The Intelligent Investor)
to learn how to not have stress. I would consider myself a world champion at avoiding stress at this point in dozens of different ways. A lot of it is just how you look at the world, but most of it is really the process of diversification. I’m not going to worry about losing one friend if I have a hundred, but if I have two friends I’m really going to be worried. I’m not going to worry about losing my job because my one boss is going to fire me, because I have thousands of bosses at newspapers everywhere. One of the ways to not worry about stress is to eliminate it. I don’t worry about my stock picks because I have a diversified portfolio. Diversification works in almost every area of your life to reduce your stress.
Timothy Ferriss (Tools of Titans: The Tactics, Routines, and Habits of Billionaires, Icons, and World-Class Performers)
Carl Hirschmann – Holden’s investment partner in the Mount Kenya Safari Club – was more than a Swiss banker as he was described in social registers. His diversified portfolio included machine tools, hotel industry, tourism, transportation, agriculture and real estate.
Howard Johns (Drowning Sorrows: A True Story of Love, Passion and Betrayal)
In the conclusion to his letter to the Post’s owner, Buffett therefore laid out his recommendations: Either stay the course with a bunch of big, mainstream professional fund managers and accept that the newspaper’s pension fund would likely do slightly worse than the market; find smaller, specialized investment managers who were more likely to be able to beat the market; or simply build a broad, diversified portfolio of stocks that mirrored the entire market. Buffett obliquely noted that “several funds have been established fairly recently to duplicate the averages, quite explicitly embodying the principle that no management is cheaper, and slightly better than average paid management after transaction costs.
Robin Wigglesworth (Trillions: How a Band of Wall Street Renegades Invented the Index Fund and Changed Finance Forever)
TWO AND A HALF CENTURIES AGO, Amsterdam was the world’s commercial center, but many of its wealthy merchants were reeling from one of the world’s first financial crises. The shares of the British East India Company had collapsed, culminating in a series of bank failures, government bailouts, and ultimately nationalization, a debacle that rippled across the continent’s nascent markets. For a little-known Dutch merchant and stockbroker, it proved the inspiration for an idea ahead of its time. In 1774, Abraham von Ketwich set up a novel, pooled investment trust he called Eendragt Maakt Magt—Dutch for “Unity Creates Strength.” This would sell two thousand shares for five hundred guilders each to individual investors, and invest the proceeds into a diversified portfolio of fifty bonds. These were divided into ten different categories, from plantation loans, bonds backed by Spanish or Danish toll road payments, to an assortment of European government bonds. At the time, bonds were physical certificates written on paper or even goatskin, and these were stored in a solid iron chest with three locks, which could be opened only by Eendragt Maakt Magt’s board and an independent notary. The aim was to pay a 4 percent annual dividend, and disburse the final proceeds only after twenty-five years, hoping that the diversity of the portfolio would protect investors.1 As it turns out, a subsequent Anglo-Dutch war in 1780 and Napoleon’s occupation of Holland in 1795 wreaked havoc on Eendragt Maakt Magt. The annual payments never materialized, and investors didn’t receive their money back until 1824, albeit then receiving 561 guilders a share. Nonetheless, Eendragt Maakt Magt was a brilliant invention that would go on to inspire the birth of investment trusts in Great Britain and eventually the mutual fund we know today. It is also arguably the ultimate intellectual forefather of today’s index funds, given its minimal trading, diversified approach, and low fees, charging a mere 0.2 percent a year.
Robin Wigglesworth (Trillions: How a Band of Wall Street Renegades Invented the Index Fund and Changed Finance Forever)
The indefiniteness of finance can be bizarre. Think about what happens when successful entrepreneurs sell their company. What do they do with the money? In a financialized world, it unfolds like this: • The founders don’t know what to do with it, so they give it to a large bank. • The bankers don’t know what to do with it, so they diversify by spreading it across a portfolio of institutional investors. • Institutional investors don’t know what to do with their managed capital, so they diversify by amassing a portfolio of stocks. • Companies try to increase their share price by generating free cash flows. If they do, they issue dividends or buy back shares and the cycle repeats. At no point does anyone in the chain know what to do with money in the real economy. But in an indefinite world, people actually prefer unlimited optionality; money is more valuable than anything you could possibly do with it. Only in a definite future is money a means to an end, not the end itself.
Peter Thiel (Zero to One: Notes on Startups, or How to Build the Future)
Who decides the parameters of this real world, where the initiation seems like self-sacrifice? Give up your personal vision of happiness in exchange for a collective vision: work hard, get married, buy a house, have a kid or two, diversify your portfolio, retire comfortably without burdening your children, die.
Rachel Friedman (The Good Girl's Guide to Getting Lost: A Memoir of Three Continents, Two Friends, and One Unexpected Adventure)
In 1992, David Koch likened the brothers’ multipronged political strategy to that of venture capitalists with diversified portfolios. “My overall concept is to minimize the role of government and to maximize the role of the private economy and to maximize personal freedoms,
Jane Mayer (Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right)
A lightbulb turned on when I realized the investors I admire the most (and this admiration comes only in part from the amazing success they’ve achieved) tend to share one characteristic: They are concentrated value investors. That is, they adhere to a concentrated approach to portfolio construction, holding a small number of securities as opposed to a broadly diversified portfolio.
Allen C. Benello (Concentrated Investing: Strategies of the World's Greatest Concentrated Value Investors)
The tools of traditional finance, like modern portfolio theory, can help investors establish efficient portfolios to maximize their wealth with acceptable levels of risk. However, mental accounting makes it difficult to implement these tools. Instead, investors use mental accounting to match different investing goals to different asset allocations. This often leads to investors diversifying their portfolios by goal rather than in total. When investors pick investments in each goal-focused mini portfolio, they examine each choice’s individual risk and return characteristics and ignore their diversification characteristics. They eliminate the choices they view as inferior and then often simply divide their money equally among the acceptable choices.
John R. Nofsinger (The Psychology of Investing)
Large-cap U.S. Stock S&P 500 Index Midcap U.S. Stock S&P Midcap 400 Index Small-cap U.S. Value stock Russell 2000 Value Index Non-U.S. Developed stock MSCI EAFE Index Non-U.S. Emerging stock MSCI Emerging Markets Index Real Estate Dow Jones U.S. Select REIT Index Natural Resources Goldman Sachs Natural Resources Index Commodities Deutsche Bank Liquid Commodity Index U.S. Bonds Barclays Capital Aggregate Bond Index Inflation Protected Bonds Barclays Capital U.S. Treasury Inflation Note Index Non-U.S. Bonds Citibank WGBI Non-U.S. Dollar Index Cash 3-Month Treasury Bill
Craig L. Israelsen (7Twelve: A Diversified Investment Portfolio with a Plan)
Ben Graham–style bargain equities, we may become quite uncomfortable at times, especially if the market value of the portfolio declined precipitously. We might look at the portfolio and conclude that every investment could be worth zero. After all, we may have a mediocre business run by mediocre management, with assets that could be squandered. Investing in deep value equities therefore requires faith in the law of large numbers—that historical experience of market-beating returns in deep value stocks and the fact that we own a diversified portfolio will combine to yield a satisfactory result over time. This conceptually sound view becomes seriously challenged in times of distress. By contrast, an investor in high-quality businesses that are conservatively financed and run by shareholder-friendly managements may fall back on the well-founded belief that no matter how low the stock prices of those companies fall, the businesses will survive the downturn and recover value over time.
John Mihaljevic (The Manual of Ideas: The Proven Framework for Finding the Best Value Investments)
Over the 210 years I have examined stock returns, the real return on a broadly diversified portfolio of stocks has averaged 6.6 percent per year.
Jeremy J. Siegel (Stocks for the Long Run: The Definitive Guide to Financial Market Returns & Long-Term Investment Strategies)
Low investment amount: One can start with as low as Rs. 1000 and get the advantage of investing in a diversified equity portfolio.
Jigar Patel (NRI Investments and Taxation: A Small Guide for Big Gains)
There are less than a handful of principles that, if mastered, get you 95+% of the way to an optimal portfolio: stay diversified, keep expenses low, have a plan, save and invest early and often.
Alex H. Frey (A Beginner's Guide to Investing: How to Grow Your Money the Smart and Easy Way)
Paul Samuelson, first American to win the Nobel Prize in Economic Science: "The most efficient way to diversify a stock portfolio is with a low fee index fund. Statistically, a broadly based stock index fund will outperform most actively managed equity portfolios.
Taylor Larimore (The Bogleheads' Guide to Investing)
And if you don’t believe me or even Charley, remember that Warren Buffett, perhaps the greatest investor of our time, has opined that all investors would be better off if their portfolio contained a diversified group of index funds.
Charles D. Ellis (The Index Revolution: Why Investors Should Join It Now)
What does diversification mean in practice? It means that when you invest in the stock market, you want a broadly diversified portfolio holding hundreds of stocks. For people of modest means, and even quite wealthy people, the way to accomplish that is to buy one or more low-cost equity index mutual funds. The fund pools the money from thousands of investors and buys a portfolio of hundreds of individual common stocks. The mutual fund collects all the dividends, does all the accounting, and lets mutual fund owners reinvest all cash distributions in more shares of the fund if they so wish.
Burton G. Malkiel (The Elements of Investing: Easy Lessons for Every Investor)
One asset class that belongs in most portfolios is bonds. Bonds are basically IOUs issued by corporations and government units. (The government units might be foreign, state and local, or government-sponsored enterprises such as the Federal National Mortgage Association, popularly known as Fannie Mae.) And just as you should diversify by holding a broadly diversified stock fund, so should you hold a broadly diversified bond fund.
Burton G. Malkiel (The Elements of Investing: Easy Lessons for Every Investor)
Unlike common stocks, whose dividends and earnings fluctuate with the ups and downs of the company’s business, bonds pay a fixed dollar amount of interest. If the U.S. Treasury offers a $1,000 20-year, 5 percent bond, that bond will pay $50 per year until it matures, when the principal will be repaid. Corporate bonds are less safe, but widely diversified bond portfolios have provided reasonably stable interest returns over time.
Burton G. Malkiel (The Elements of Investing: Easy Lessons for Every Investor)
I’m speaking here about the classic index fund, one that is broadly diversified, holding all (or almost all) of its share of the $15 trillion capitalization of the U.S. stock market, operating with minimal expenses and without advisory fees, with tiny portfolio turnover, and with high tax efficiency. The index fund simply owns corporate America, buying an interest in each stock in the stock market in proportion to its market capitalization and then holding it forever.
John C. Bogle (The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits 21))
Following the evidence, I concluded that individuals fare best by constructing equity-oriented, broadly diversified portfolios without the active management component. Instead of pursuing ephemeral promises of market-beating strategies, individuals benefit from adopting the ironclad reality of market-mimicking portfolios managed by not-for-profit investment organizations. The
David F. Swensen (Unconventional Success: A Fundamental Approach to Personal Investment)
The key to building a successful portfolio is to diversify your assets in such a way that you maximize your chances of reaching your financial goals with a minimum amount of risk. 2.
Bill Schultheis (The Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get On with Your Life)
So much in our culture reinforces the idea that a relationship is everything, but just as it’s financially smart to have a diversified portfolio of investments, the more you strive to make as many aspects in your life as meaningful as possible, the more satisfied you’ll feel.
Jenny Taitz (How to Be Single and Happy: Science-Based Strategies for Keeping Your Sanity While Looking for a Soul Mate)
In diversifying blockchain portfolio, there is a common pattern. And that is, what you thought was solid foundation turned into liquid, and what you thought was liquid turned into a solid foundation.
Olawale Daniel
Warren Buffett is saying that portfolio concentration, or focusing on a few investments rather than diversifying, is a better strategy.
Robert T. Kiyosaki (Rich Dad's Cashflow Quadrant: Rich Dad's Guide to Financial Freedom)
We know a very successful executive who, upon retirement, put all his investments into high-quality, diversified, municipal bonds. The income from the bonds is more than sufficient for his family’s lifestyle. This executive wants to spend his time traveling and on the golf course—not managing a complex portfolio of assorted securities. His simple portfolio may be unusual, but we think it’s probably a very suitable portfolio for him. However, most of us want a return greater than is available from savings, CDs, and bonds. This is why we use stocks to provide the growth and additional income needed to meet our goals. DESIGNING OUR PERSONAL ASSET ALLOCATION PLAN We have discussed the Efficient Market Theory and Modern Portfolio Theory.
Taylor Larimore (The Bogleheads' Guide to Investing)
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The most efficient way to diversify a stock portfolio is with a low fee index fund.5 —Paul Samuelson, 1970 Nobel Prize in Economics
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Diversifying across many investments that are dissimilar and rebalancing those investments to their original target at the end of the year can reduce the annual volatility of the portfolio over time by enough to increase the compounded return. This “free lunch” from rebalancing is the essence of modern portfolio theory.
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We favor familiar investments. This might include shares of our employer, companies that compete in the industry where we work, corporations that are headquartered near our home and companies whose products we use. The familiarity makes these stocks more comfortable to own, but the result is often a badly diversified portfolio with a lot of unnecessary risk.
Jonathan Clements (How to Think About Money)
In fact, Yale’s return for the ten years ending June 30, 1998 amounted to 15.5 percent per annum, more than three full percentage points short of the S&P 500’s 18.6 percent result. The endowment’s deficit relative to the then-highest-performing asset class of domestic equity caused naysayers to question the wisdom of undertaking the difficult task of creating a well-diversified equity-oriented portfolio.
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Given the difficulties in timing markets and the challenges of security selection, such behavior provides a rational foundation for investment management. By avoiding extreme allocation shifts and holding diversified portfolios, investors cause asset allocation to account for the largest share of portfolio returns.
David F. Swensen (Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment, Fully Revised and Updated)
In its most basic form, the message of Unconventional Success requires only a few pages to describe the blueprint of a well-diversified, equity-oriented, passively managed portfolio, using not-for-profit investment managers to implement the plan.
David F. Swensen (Unconventional Success: A Fundamental Approach to Personal Investment)
Ultimately, Unconventional Success proposes a positive solution to the investments challenge facing individual investors. The investment management world includes a very small number of not-for-profit money management firms, allowing investors the opportunity to invest with organizations devoted exclusively to fulfilling fiduciary obligations. Moreover, the market contains a number of attractively structured, passively managed investment alternatives, affording investors the opportunity to create equity-oriented, broadly diversified portfolios. In spite of the massive failure of the mutual-fund industry, investors willing to take an unconventional approach to portfolio management enjoy the opportunity to achieve financial success.
David F. Swensen (Unconventional Success: A Fundamental Approach to Personal Investment)
Investors generally fail to follow the most basic investment precepts. Instead of concentrating on the central issue of creating sensible long-term asset-allocation targets, investors too frequently focus on the unproductive diversions of security selection and market timing. Instead of constructing equity-oriented, well diversified, tax-sensitive portfolios, investors too frequently choose to mimic the conventional, poorly structured consensus
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Although those who wait long enough will eventually recoup losses on a diversified portfolio of stocks, buying stocks at or below their historical valuation is the best way to guarantee superior returns.
Jeremy J. Siegel (Stocks for the Long Run: The Definitive Guide to Financial Market Returns & Long-Term Investment Strategies)
Environmental influences almost invariably point investors down the path to investment failure. Advertisements flog stocks at equity market peaks, with nary a mention of diversifying fixed-income assets. After stocks suffer bear-market losses, the media tout the beneficial effects of owning bonds as an important part of a well-balanced portfolio. The overwhelming bulk of messages to investors suggest owning yesterday’s darling and avoiding yesterday’s goat.
David F. Swensen (Unconventional Success: A Fundamental Approach to Personal Investment)
When a trader reaches a point where they are managing more money than they can efficiently day trade, they would typically begin to branch out by adding longer term investments to diversify the portfolio.
Ross Cameron (How to Day Trade: A Detailed Guide to Day Trading Strategies, Risk Management, and Trader Psychology)
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