After reading Dr. Desai’s excellent book twice, I could still benefit from a book club discussion to comprehend the enormous challenges that “The Wisdom of Finance” takes on. Thus, I present an amateur review of a complex problem from a do-it-yourselfer (DIY) regular investor. But the implications of combining humanity and finances have never been greater. The world is changing, the financial industry and the humanities had better get prepared for this inevitable evolution.Learn More
The Stock and Bond Markets are up again in the third quarter of 2016. Read how my portfolio has returned 6.7% after nine months. It’s really not complicated because my portfolio is straightforward. It’s constructed to gain when the core asset classes increase and loses value when the market goes down.
Losing is an important part of investing process, if not the most important part. The majority of people don’t understand it because they sell when their investment declines. Never sell, unless it is part of your plan, not because of bear market conditions. Have a plan and stick with it during ups and downs.
Many financial planning professionals are trying to scare people into “doing something” with your bonds. Ignore the warnings from the pundits on the financial news mania that you should now buy gold or precious metals. Even my favorite radio political pundit, former Senator Tom Harkin, warns people to buy gold. With all due respect, the former good Senator doesn’t know what he is talking about by telling people in his commercials to put all of their money in gold, because he has been predicting a stock market crash for over a year. That is despicable advice and he should stick to what he does best, discuss progressive ideas.
Be mindful that these articles and the pundits have an agenda. The articles are written by authors who usually work for a firm that happens to sell “what you need” and the reporters or radio hosts want views or website clicks. Scare tactics work every time, but not to readers here. Have a balanced plan with stocks and bonds approximately equal to your age. The post discusses in more detail why I have half of my portfolio in one bond fund, Vanguard’s Total Bond Market Index. I will NEVER buy gold!
Steve’s comment: Guest Author Jessica Kane shows how some regular people of all income levels become wealthy. Those who earned their way to being financially secure executed those common sense daily habits we all share. I love articles that show the behavioral similarities between the wealthy and the rest of us. I think it comes down to actually believing that if you are consistent and disciplined about the goal of saving and learning to manage your investments, after time, your assets will grow more than you think and you’ll become financially secure. It’s a darn good feeling.Learn More