Growing Your Net Worth

The blog is dedicated to providing content to support better financial decisions to make a positive impact on your net worth.

Blog By:
IsaiahDouglass

Summary

So, the natural question is Isaiah why to go through all the effort to write and explain when you and I both know it’s unlikely anyone’s opinion has been changed. I mean when has the internet ever changed someone’s mind? The Boglehead community is fierce and set in their ways. First, I want feedback and to provide a springboard for discussion to learn. I embrace thoughtful discussion and counter-arguments to what I’ve laid out in previous posts. I read a lot on this topic. I find it a passion and hobby while boring for a lot of people, I enjoy it and always have.

My rationale is not to write a post in 10 years and said I told you so. First, I’d have to be right and who knows if that will happen. Second, if we would experience a market trend change or recession, it’s never okay to gloat or rub someone’s nose in that. We are talking about someone’s life savings, a family vacation, college, home down payment, or legacy to a charity. I wrote what I wrote because there are a lot of people with a warped sense of security and reality around investing. Today, many people’s expectations of the market return are 8%-10%. Vanguard’s expectations for a 60/40 portfolio are 4%-6%, vs. a 9.4% return since 1970.

They believe there is no value in investing outside of what the cost of the investment happens to be. That’s a naïve and shortsighted mindset. I’m not advocating for high-cost expensive investments because I’m compensated on them. The financial services industry is full of those folks. Heck, I’m not even paid on AUM, I give all clients the option to self-direct.

“The best time to think about losing is when you’re winning.” -Casey Stengel | American Baseball Player and Manager

While my gifts as a writer are few, I hope you can see there are tremendous benefits from diversifying via trend and factors, as well as thinking more globally. The world has not changed that diversification is dead; there will be pain again for the concentrated US investor. When or how I do not know. I don’t predict a time or date, because that is a loser’s game. Howard Marks talks about probabilities in his book Mastering the Market Cycle: Getting the Odds on Your Side. You want to look at what is probable and then make decisions appropriately. The probabilities are that the US will not be the dominant force in the market for the next ten years like they have the last ten.

I’m a long-term investor and will measure my results as such, I don’t believe I am any smarter than anyone else. I’ve been fortunate to be able to read, meet, and talk with intelligent people. That has enabled me to find research that has shaped my beliefs for what I believe successful investing looks like. I know that as I learn and evolve things may change, I refuse to become a dinosaur refusing to adapt as evidence is proven. I will however not change my beliefs unless there are the following reasons: empirically supported, theoretically sound, and behaviorally intransigent.

If you want to get ahead in investing the first step is to have a plan and save; I help people do both. Then we can dive into some of the details outlined in prior posts.

If you’d like to book a time to discuss the blog series or anything else you can get time on my calendar here.