Comment by nabla9
6 years ago
His advise is still sound if you are an investor and not speculator.
The part of your investment that is in stock should be determined your investment horizon. If you don't need to sell your stock in next 15 years, don't hold cash.
Yeah, would have played out very well for those top ticking n225 in 1989, esp with every global CB's trying to follow in the footsteps of the BOJ, while everyone is crowding into "diversification" and searching for yield…
I consider investors to be the same as speculators, just speculators who think their beliefs will remain valid over long time frames… cause that's the gamble.
investor who does
- dollar cost averaging,
- diversification, small cost investing,
- has sufficiently long time-horizon
has never lost money on 15 year timescale, at least past WWII.
Even assuming that's true, one can't say the sort of risk and investor took on 15 year look-backs since WWII has been evenly distributed to get some sort of acceptable return, nor can one say that this will continue hold true for the next 15 years. You may believe it hold true though, and many do… but very few will do their homework on the risks to their "diversification" and their own changing liquidity constraints that will occur over the "sufficiently long time-horizon"
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So if you don't believe in investing then what are your plans for retirement? Just to save enough money into a bank account?
I didn't say I didn't believe in investing, just that I don't consider it any different from speculating, just the time frame typically involved.