Quotes About Risk

Investing is 95% luck and 5% skill. And maybe if I'm wrong, it's 98 and 2.

Asset allocation, where to park your money and how to divide it up, is the single most important skill of a successful investor.

So if you think you can time the markets, you're wrong.

diversify across time. And that's what dollar-cost averaging does for you.

You can also lose everything you've saved and invested. So whatever you put in your Risk/Growth Bucket, you have to be prepared to lose a portion or even all of it if you don't have protective measures in place.

whatever your favorite investment might be, at some point in your life, you can count on it dropping 50% to 70% in value. While there's unlimited potential for upside in this bucket, never forget that you could lose it all (or at least a significant portion). That's why I call this the Risk/Growth Bucket and not the Growth/Risk Bucket, because growth is not guaranteed, but risk is!

Para la mayoría de la gente, el temor a la pérdida es mucho mayor que el deseo de ganar.

A lot of brilliant people are terrible investors. The reason is that they don't have the ability to make decisions with limited information. By the time you get all the information, everyone else knows it, and you no longer have the edge.

Timing the market is basically playing poker with the best players in the world who play round the clock with nearly unlimited resources.

Then you need long-term government bonds. Fifteen percent in intermediate term [seven- to ten-year Treasuries] and forty percent in long-term bonds [20- to 25-year Treasuries].

The whole trick in investing is: "How do I keep from losing everything?" If you use the 200-day moving average rule, then you get out.

Asset allocation, 2. Diversification, 3. Tax efficiency.

Porque sabe que el cambio conduce hacia lo desconocido, y la mayoría de la gente cree que lo desconocido será mucho más doloroso de lo que ya está experimentando. Es como lo que dicen los viejos proverbios: «Más vale lo malo conocido, que lo bueno por conocer», o «Más vale pájaro en mano que ciento volando».. Estas creencias esenciales nos impiden emprender acciones capaces de cambiar nuestras vidas.

You don't want to hesitate to get in the market trying to have perfect timing; instead, use dollar-cost averaging and know that volatility can be your friend

Asset allocation is everything!

because it's really, really hard. If this was easy, if there was one formula, one way to do it, we'd all be zillionaires. One principle for sure would be get out of anything that falls below the 200-day moving average.

So that was the rub. That the best chance for long-term growth and financial freedom is a well balanced portfolio that minimizes fees and taxes but that comes with risk.

But you have to take some of those assets off the table to reduce your exposure to risk and make certain that you keep some of the gains or profits you've made.

Don't lose money!" But for many investors, that means having to settle for mediocre returns in the Security Bucket.

Note that past results do not guarantee future performance. Instead, I am providing you the historical data here to discuss and illustrate the underlying principles.

Investing is 95% luck and 5% skill. And maybe if I'm wrong, it's 98 and 2. TR: Not to insult any active managers!

And finally, we learned that wealth without risk is a possibility. Sure, there is risk in everything, but we learned that certain structures will allow us to participate when the market goes up and not lose when it falls!

Rule 1: don't lose money. Rule 2: see Rule 1. —WARREN BUFFETT'S RULES OF INVESTING

You'll learn more about this in chapter 4.1 on asset allocation, but for now, just know that if real estate's mantra is "Location! Location! Location!" then the mantra for getting better returns while reducing risk is "Diversification! Diversification! Diversification!" Effective diversification not only reduces your risk but also offers you the opportunity to maximize your returns.