Quotes About Diversification

even if the majority agree that low cost index funds are the main ingredients).

20% US Total Stock Index 20% Developed (Foreign) Markets Index 20% US REIT Index (Real Estate) 15% Long-term US Treasuries Index 15% US TIPS Index (Treasury inflation-protected) 10% Emerging Markets Stock Index

That's why asset allocation is so important. What do all the smartest people in the world say? "I'm going to be wrong." So they design their asset allocation ideally to make money in the long term even if they're wrong in the short term.

The goal of the nonprofessional should not be to pick winners—neither he nor his "helpers" can do that—but should rather be to own a cross section of businesses that in aggregate are bound to do well. A low-cost S&P 500 index fund will achieve this goal. —WARREN BUFFETT, 2013 letter to shareholders

33% US Total Bond Index 27% US Total Stock Index 14% Developed (Foreign) Markets Index 14% Emerging Markets Stock Index 12% US REIT Index (Real Estate)

65% US Total Stock Index 35% Intermediate-Term US Bond Market Index.

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

Asset allocation is more than diversification. It means dividing up your money among different classes, or types, of investments (such as stocks, bonds, commodities, or real estate) and in specific proportions that you decide in advance, according to your goals or needs, risk tolerance, and stage of life.

Third, they could utilize a risk-parity portfolio. Remember, this is a very different approach than just balancing the dollar amounts you have invested in assets—which is the basic diversification strategy that almost everyone else in the industry utilizes. And it's a strategy that anyone can implement.

Tony, by having a fifty-fifty portfolio, you really have more like ninety-five percent of your risk in stocks!

The overwhelmingly most important [as you figured out] is asset allocation.

Ray is showing us that if your money is divided equally, yet your investments are not equal in their risk, you are not balanced!

And the reason people get screwed is that by the time they hear that the stock market (or gold, or the real estate market, or commodities, or any other type of investment) is a great place to go, very often the bubble is just about to end. So you need to put in place a system to make sure you don't get seduced into putting too much of your money in any one market or asset class or too much in your Risk/Growth Bucket.

One of your rules for diversification is to never have anything weighted more than 30%, is that correct? DS: Yes.

You've probably heard that old rule of thumb (or what Jack Bogle calls a "crude method"): invest your age in bonds. In other words, subtract your age from 100, and that would be the percentage you should keep in stocks.

A portfolio of low-cost index funds is the best approach for a percentage of your investments because we don't know what stocks will be "best" going forward.

Lastly, the portfolio must be rebalanced. Meaning, when one segment does well, you must sell a portion and reallocate back to the original allocation.

I don't mind doing occasional guest appearances on shows, but I have other things I'd like to do in my life now.

True learning involves learning other ways of doing what you can do already.

I was a stock broker once. I think there is an absolute place for market investments. But they should never be the basis of one's retirement. They should be an additional piece on top of a basic, secure, guaranteed retirement benefit.

After my debut film, I was doing reality shows and hosting so it was not that I had nothing else to do.

You just don't want to get pigeon-holed into one position. That's why even though I start out at center, I may play small forward, if I get a rebound and you're not there I can bring the ball up.

I didn't play receiver my whole life. I played running back, and I liked a bunch of running backs coming up, but I never tried to emulate them.

And so Fannie Mae produces very strong results for investors in - when interest rates are high and when interest rates are low, in recession and during booms.