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One of Investing's BIGGEST Misconceptions 

Next Level Life
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One of Investing's BIGGEST Misconceptions:
I often come across statements about how a certain investment or asset is bad to hold due to its near-term future return prospects. And, while this may have some validity for the more active traders, for long-term buy and hold investors I don't believe this is all that important. Because what we ultimately care about is how our overall portfolio is going to perform, not how any individual piece within that portfolio is going to perform.
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7 авг 2022

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Комментарии : 28   
@davelafferty605
@davelafferty605 Год назад
Sir: I've been watching your channel for years now, and I sincerely appreciate the way you can break down any given subject in a way anyone can understand. Thanks for what you do.
@NextLevelLife
@NextLevelLife Год назад
Thanks, Dave :)
@lwhite513
@lwhite513 Год назад
Years of listening to financial RU-vid channels and in the last two I've learned very few new concepts. This was a new one for me and a great reminder to always be learning :]
@NextLevelLife
@NextLevelLife Год назад
Absolutely agree! I'm glad to hear you got something out of it :)
@driftingintoretirement
@driftingintoretirement Год назад
Always love watching your channel. Thanks
@NextLevelLife
@NextLevelLife Год назад
Thanks for watching!
@hrhsophiathefirst4060
@hrhsophiathefirst4060 Год назад
This is a very good breakdown of this theory, it is truly diversification at its strongest!
@future62
@future62 Год назад
Damn this is a game changer. I know you're not a financial advisor but this has me rethinking my allocations
@dudefromlaveenaz
@dudefromlaveenaz Год назад
Love it man! Really enjoyed your content!
@NextLevelLife
@NextLevelLife Год назад
Glad you enjoyed it!
@joshgonzalez5382
@joshgonzalez5382 Год назад
Love your videos!
@NextLevelLife
@NextLevelLife Год назад
Thanks, Josh! I'm glad to hear that :)
@favjr
@favjr Год назад
You should have called it "Growing A Golden Butterfly" through basic principles of diversification
@robertspencer5219
@robertspencer5219 Год назад
I'm a 100% stocks guy but as I get close to retirement from W2 employment I'll give changing that some serious thought
@NextLevelLife
@NextLevelLife Год назад
Never a bad idea to occasionally reassess your approach to ensure that it aligns with your current situation and goals :) Thanks for the comment!
@Sylvan_dB
@Sylvan_dB Год назад
It would be interesting to know the "optimal" percentage of bonds. Also, while cash doesn't have the possible upside of bonds (neither do bonds right now) it also doesn't have the down side potential. Maybe cash instead of some part of the bonds? Also, it may be erroneous to group all the different ways of slicing the stock market into one "stock" category. Large v small cap, growth v value, dividend aristocrats v dividend payers v non-payers, etc. As much as I disagree with using Fama and French as predictive, I do like their factor analysis of historical returns.
@Sylvan_dB
@Sylvan_dB Год назад
Stock, bond and gold was the basis of Harry Browne's Permanent Portfolio. TL;DR: 25% each to stock, long-term treasuries, gold and cash. Rebalance if the allocation to any drops below 15% or increases beyond 35% (in other words, a 15% to 35% range for each, or can use 20% to 30% but no tighter or you sell your winners too early).
@abrahamkibret1053
@abrahamkibret1053 Год назад
Would have been nice to see comparisons with portfolios that have inflation indexed bonds.
@sprinkle61
@sprinkle61 Год назад
Its hard to backtest a product that didn't exist 10 years ago in a 1972 to today analysis. Also, you can't 'rebalance' TIPS every year, because they have a holding period of at least 5 years with penalty like a CD. Rebalancing is the key to this strategy, but it isn't made very clear in the video.
@nickfifield1
@nickfifield1 Год назад
Haven’t we just seen stocks and bonds falling at the same time???
@Sylvan_dB
@Sylvan_dB Год назад
Since 1980 we've been in a bond bull due to falling interest rates. How much bull is left? How will that affect future returns? It's anyone's guess.
@derekmarlowe522
@derekmarlowe522 Год назад
@@Sylvan_dB you got it backwards. falling rates has caused a BEAR market for bonds not bull...
@Sylvan_dB
@Sylvan_dB Год назад
@@derekmarlowe522 Falling rates cause bond prices to increase. It's basic math.
@sprinkle61
@sprinkle61 Год назад
This greatly depends on being willing to do a lot of counter market trading, selling winners and buying losers. Most people can't let go of their emotions like that, and without that, the returns would be much worse.
@acrobizer1238
@acrobizer1238 Год назад
You did not mention the factor of dollar cost averaging that REALY beefs up a 100% stock fund over time. Is this hypothetical portfolio being contributed to or is it static?
@eshapard
@eshapard Год назад
Agreed. Having some investments that zig when your other investments zag has been covered ad nauseum (Modern Portfolio Theory, Markowitz, 1952). Perhaps the real biggest misconception about investing as that optimizing for a one-time lump-sum investment is the best way to optimize for a series of periodic investments over many years.
@YasinNabi
@YasinNabi Год назад
If you want to get rich, focus on creating value to the market, then the money itself will flow in, Value itself is the symbol of money you are making, a fellow creator
@Jason-gp4hg
@Jason-gp4hg Год назад
The three fund portfolio is all you need
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