A Quote by Harry Markowitz
If the investor doesn't have enough time and skill to investigate individual stocks or enough money to diversify a portfolio, the right thing to do is to invest in exchange-traded funds that give you exposure to asset classes. It does make sense for the individual investor to think in terms of holding individual asset classes.
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We can extrapolate from the study that for the long term individual investor who maintains a consistent asset allocation and leans toward index funds, asset allocation determines about 100% of performance.
I don't invest in the stock market. I did it a long, long time ago when I was really young, and I got involved in all the investigations and all the prosecutions, and I felt it was better if I didn't make individual investments. So I'm invested in funds, but not in individual - not in individual stocks.
Unlike cheap stocks, inexpensive asset classes have a lower chance of big drawdowns (broad asset classes don't go to zero) and a higher probability of average or better returns.
The most important thing you can have is a good strategic asset allocation mix. So, what the investor needs to do is have a balanced, structured portfolio – a portfolio that does well in different environments…. we don't know that we're going to win. We have to have diversified bets.
Children should be taught in school that you should have all kinds of asset classes in your portfolio. They should be taught what those asset classes are, and their advantages and disadvantages.
Owning a variety of asset classes means that some part of your portfolio will be doing well when the cyclical turmoil arises. A broadly diversified portfolio includes large capitalization stocks, small cap, emerging markets, fixed income, real estate and commodities.
The institutional investor remains the bigger influence on individual trades simply because the institutional investor has more money to support the order and that will have more of an impact on the stock.
We're mathematically past the point where the accumulation of individual actions can add up quickly enough to make a difference. The individual action that actually matters is not being an individual. It's joining together with other people in groups large enough to change the political dynamic around climate change.
we have complaints that institutional dominance of the stock market has put 'the small investor at a disadvantage because he can't compete with the trust companies' huge resources, etc. The facts are quite the opposite. It may be that the institutions are better equipped than the individual to speculate in the market.But I am convinced that an individual investor with sound principles, and soundly advised, can do distinctly better over the long pull than large institutions.
In the 40 years I've been working as an economist and investor, I have never seen such a disconnect between the asset market and the economic reality... Asset markets are in the sky, and the economy of the ordinary people is in the dumps, where their real incomes adjusted for inflation are going down and asset markets are going up.
The individual investor should act consistently as an investor and not as a speculator. This means ... that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money's worth for his purchase.
Peace, for us, is an asset and in our interest. It is an absolute human asset that allows an individual to freely develop his individuality unbound by any regional, religious, or ethnic fetters.
When classes are small enough to allow individual student-teacher interaction, a minor miracle occurs: Teachers teach and students learn
If you hope to have more money tomorrow than you have today, you've got to put a chunk of your assets into stocks. Sooner or later, a portfolio of stocks or stock mutual funds will turn out to be a lot more valuable than a portfolio of bonds or CDs or money-market funds.
For the first time in human evolution, the individual life is long enough, and the cultural transformation swift enough, that the individual mind is now a constituent player in the global transformation of human culture.
Ask yourself: Am I an investor, or am I a speculator? An investor is a person who owns business and holds it forever and enjoys the returns that U.S. businesses, and to some extent global businesses, have earned since the beginning of time. Speculation is betting on price. Speculation has no place in the portfolio or the kit of the typical investor.
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