Guest post by Contributing Editor, Lowell Herr, ITA Wealth Management. Lowell is a subscriber to the Portfolioist and his investment philosophy is similar to ours. Enjoy.
The Golden Rule of Investing is simply, “Save as much as you can as early as you can.” The operative word is early. William J. Bernstein lays it out in stark language in his book, “The Investor’s Manifesto“ when he writes, “Each dollar you do not save at 25 will mean two inflation-adjusted dollars that you will need to save if you start at age 35, four if you begin at 45, and eight if you start at 55. In practice, if you lack substantial savings at 45, you are in serious trouble. Since a 25-year-old should be saving at least 10 percent of his or her salary, this means that a 45-year-old will need to save nearly half of his or her salary. Most 45-year-olds will find this nearly impossible, if for no other reason than the necessity of paying living expenses, payroll taxes, and income taxes.” Continue reading →
In his new book, The Investor’s Manifesto,William J. Bernstein makes a strong case not just for the idea of portfolio investing, but the fact of it. Any one of us, with a modest amount of effort, can build a good portfolio, Bernstein argues. Then he proves it.
Bernstein is not your typical individual investor. A PhD and formerly practicing neurologist, he has a wild passion for investing, and an appetite for dot matrix diagrams that can be a bit intimidating. A bestselling author of four previous books on investing and economic history, in this tome the good doctor set out to write something accessible to the masses. He’s achieved his goal. Continue reading →
Investors don’t trust the equities markets. That’s the theme of a number of articles out over the past couple of days. The Wall Street Journal’s portrait of panic on the day of the Flash Crash details how massive institutional traders’ behavior lead to the the amazing downward spiral and how only a market rumor — of a “fat” fingered mis-typed trade — slowed it. Plenty of people in the piece are worried we could see a repeat. Continue reading →