231–240 of 264 posts
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> the active fund is now always ahead of the index but the question is how do you select the active fund which will consistently beat the market in the future.
look for ones that have been around for 100 plus years and with 30-40 years of increasing dividend payments
I am one of those people who have lived this advice and after 10 years of following some of the recommendations here, I can confirm that it works. Here are my 5 simple rules that I followed, no lottery/IPO, just a steady single income. - Max out 401K and get company match - Max out Roth IRA for me and my wife - Invest in Vanguard S&P 500 Index Funds, some international funds and some bonds - Invested in a property in…
This is good advice but may also have some element of survivorship bias. If you haven't noticed, not everybody works for Google. In fact, not everybody works for a company that will match their 401(k). If you're lucky enough to be taking home a six figure salary (not to mention one that grows with bonuses as you progress) every year, maybe this advice is good. But you should consider in your advice that not everyone…
Matt's article (and the linked one of Scott Adams' advice) is a good and basic foundation. Adding to the reading list, I'd very strongly recommend the following: A Random Walk Down Wall Street by Burton G. Malkiel lays out the basics of portfolio diversification. http://www.powells.com/biblio/1-9780393340747-0 The Great Crash: 1929 by John K. Galbraith tells the story and aftermath of the biggest stock market catastr…
While the conclusions in this book happen to be valid for the vast majority (i.e. somewhere between 95-99% of the population should stick to index investing), people often mis-apply the conclusions in this book to suggest that certain things are impossible, and that is clearly false and misleading.
There are people who invest and trade successfully, and they are not lucky outliers any more than a brain surgeon is a lucky outlier.
I once asked a guy who made his living off of trading stocks and futures how long would it take me to learn. His answer was sobering. If I made it my full time job for 3-5 years, I could learn to be marginally profitable, and with additional years of experience I could make enough to live off of. He guessed maybe 5-10 years of 40+ hours per week dedicated to trading, and even then, if I did not study the right things I could still fail. Contrast this with the average Joe trying his hand at investing, and of course they will fail. You can't dedicate 3-5 hours per week and expect to be a competent brain surgeon.
Using the same logic in this book, we could conclude that it's impossible for anyone to start a successful business. The message should be, it's really hard and takes a lot of work, and it takes a lot of knowledge about how to run a business, and it takes a high level of competency at some skill (coding, carpentry, whatever), and you have to be competent at communicating with others, and leading others, and not have personal baggage to draw your focus away from the business, and, well, you get the idea. It's hard, and it's not for everyone, but it's not impossible.
I am one of those people who have lived this advice and after 10 years of following some of the recommendations here, I can confirm that it works. Here are my 5 simple rules that I followed, no lottery/IPO, just a steady single income. - Max out 401K and get company match - Max out Roth IRA for me and my wife - Invest in Vanguard S&P 500 Index Funds, some international funds and some bonds - Invested in a property in…
This is good advice but may also have some element of survivorship bias. If you haven't noticed, not everybody works for Google. In fact, not everybody works for a company that will match their 401(k). If you're lucky enough to be taking home a six figure salary (not to mention one that grows with bonuses as you progress) every year, maybe this advice is good. But you should consider in your advice that not everyone…
The secret here is to start early since the expenses rise exponentially after wife and kids.
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Matt Cutts bought federal tax-free and California muni (also tax free for him) bonds. The point of my speaking up was pointing out how odd, narrow, and narrowly-specific his recommendations are. You've now added your voice to the chorus. Your recommendations are also -- narrow and a little odd. If you're a Googler with a 3% Cali muni, that's equivalent to a taxable 6.07% yield. Beats cash.
Long term capital gains is 15% not 50+%. Also, California bonds are far from a risk free investment which is why they pay more than 1%. Remember a 5+ year bond can have negative real returns if inflation increases. EX: People have paid 50 k for a 30 year T bill, waited 5 years and sold that for less than 50k. The important thing to remember in such situations is just because you did not sell the bond does not mean yo…
For a Googler making a big salary, that's 39.6% Federal plus 11% California state. Matt didn't say this in his post, you obviously don't know what you're talking about in your comment, and we've once again proven why giving investment advice on the internet is stupid.
It's either so general to be obvious, or so specific to an individual that it risks misleading people in similar (but not similar enough) scenarios. Matt did the world no favors with his post and you're not doing much with your comments.
Matt's article (and the linked one of Scott Adams' advice) is a good and basic foundation. Adding to the reading list, I'd very strongly recommend the following: A Random Walk Down Wall Street by Burton G. Malkiel lays out the basics of portfolio diversification. http://www.powells.com/biblio/1-9780393340747-0 The Great Crash: 1929 by John K. Galbraith tells the story and aftermath of the biggest stock market catastr…
[0] http://www.amazon.com/The-Intelligent-Asset-Allocator-Portfo...
Regarding most of these lessons, in 2004, Google brought in experts on personal investing to educate employees heading into its initial public offering: http://www.modernluxury.com/san-francisco/story/the-best-inv... TL;DR: Put your money into some broad-based, low-cost index funds.
ah so why do the Rothschilds put a good chunk of family money in an active fund aka RIT Capital partners. index funds are fine for some one with only a couple of grand spare - with the sort of money that comes from a good ipo you need to be a bit more sophisticated than that.
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So, you're investing only in large cap stocks, while spending as little time as possible doing analysis, and over decades have consistently surpassed the S&P returns, with low risk and low volatility? Forgive me if I don't believe this in the least.
The tech sector is the third strongest sector (of 11 sectors) over the past five years: http://news.morningstar.com/stockReturns/CapWtdSectorReturns... So what he's describing, beating the S&P 500 by a bit over that period, isn't implausible. Comparing his portfolio's performance to the S&P 500 is an obvious mistake and, more importantly, attributing his portfolio's performance to anything other than luck (good or ba…
I am not suggesting high-risk, short-term strategies but long-term, buy-and-hold strategies that leverage the native knowledge and intelligence of Silicon Valley engineers. I also do high-risk, short-term strategies (options and similar) based on the same domain expertise, and have done alright with those too, but I never recommend that to people.
It would be seriously odd if some random guy on Wall Street understood Silicon Valley and tech better than I do. The technology industry is not driven over the long-term by financial numbers on a spreadsheet. I've been through many tech boom-bust cycles in Silicon Valley and understand the dynamics pretty well. No special magic to this portfolio, and it has been one of the most consistent producers for me. As long as you are not betting the farm on a single company, it is difficult for this to go wrong. At least in tech, I can see the bad things telegraphed long before they materialize in the market because I understand the fundamentals. Even if Wall Street isn't paying attention.
For the poster below, my returns are consistently worse than every hedge fund that has ever wanted to hire me. I'd be a terrible hedge fund manager; I am personally more interested in return on effort than maximum possible returns. (They wanted to hire me for my theoretical skills, not my investing skills.)
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haha. not adjusting your employee's wages based on their work location, which company is that delusional?
Why is it delusional? The company should be willing to pay an amount based on the benefit they're receiving. Does a feature developed by someone living in NYC or SF make the company more money than the same feature developed by someone living in Ann Arbor or Atlanta? Offering a premium for people to work on-site versus remotely makes sense. Discounting the value based on expected difficulties with linguistic or cultu…
it is about fairness among workers. there should be no penalty for living close to the HQ or major office hubs, which practically always are in high-cost areas.
counter-example being SAP with Waldorf, but that is ending its lifespan for the inverse reason (no one sane wants to move there).
Earlier quoted context omitted.
Why is it delusional? The company should be willing to pay an amount based on the benefit they're receiving. Does a feature developed by someone living in NYC or SF make the company more money than the same feature developed by someone living in Ann Arbor or Atlanta? Offering a premium for people to work on-site versus remotely makes sense. Discounting the value based on expected difficulties with linguistic or cultu…
wages are not absolute, they vary by location, for the same kind of work. cost of living are taken into account when offering salaries. taxes ditto. this applies to the US as well as Europe. it is about fairness among workers. there should be no penalty for living close to the HQ or major office hubs, which practically always are in high-cost areas. counter-example being SAP with Waldorf, but that is ending its lifes…