Lessons for Building a Winning Portfolio 10 pot

... foremost, because it provides an intuitive way to think about the value of a security. A stock or bond is not an abstract piece of paper that has a randomly fluctuating value; it is a claim on real future ... observers, and unfortu- nately, this is eventually what happened. Third, and most important, the real beauty of the above formulas is that they can be rearranged to calculate the...

Ngày tải lên: 20/06/2014, 20:20

... requirements are immaterial. For example, if you havesaved a largeamount forretirementand do not plan to leavealarge estate for 114 The Four Pillars of Investing Table 4-1. 1901–2000, 100 -Year Annualized ... the S&P 500 was less than infla- tion—that is, it had a negative real return—whereas the EAFE beat inflation handily. You’ll also see that the EAFE beat the S&P 500 by...

Ngày tải lên: 20/06/2014, 20:20

... money at market bottoms than at market tops. You can think of value averaging as a combination of DCA and rebal- ancing. (Value averaging works just as well in reverse. If you are retired and in ... it, particularly in a tax- able account, as this will incur unnecessary capital gains. This methodisabout the best technique available, in myopinion, for establishing a balanced allocation...

Ngày tải lên: 20/06/2014, 20:20

... should have a firm asset allocation pol- icy in place. What separates the professional from the amateur are two things: First, the knowledge that brutal bear markets are a fact of life and that there ... side and assume that the safety penalty is just 3% per year. That means that for each dollar you make by investing in perfectly safe assets, you could have made $1.34 in risky assets af...

Ngày tải lên: 21/06/2014, 02:20

... Sheltered International Vanguard Tax-Managed MSCI EAFE Open-end * 0.35% $10, 000/NA 324 Taxable International Vanguard International NA Open-end none 0.64% $3,000/$1,000 910Sheltered Value Fidelity Spartan ... tax-advantaged. I’d recommend taking at look at www.collegesavings.org and also having a chat with your accountant about these plans, which come in many shapes and sizes. From the ass...

Ngày tải lên: 21/06/2014, 02:20

... rough.That is not to say that yourreturn requirements are immaterial. For example, if you havesaved a largeamount forretirementand do not plan to leavealarge estate for 114 The Four Pillars of ... large stocks. Small companies tend to be insubstantial and fragile. More importantly, they are thinly traded—relatively few shares change hands during an average day, and in a general downtu...

Ngày tải lên: 21/06/2014, 12:20

... companies arecalled “growth stocks,” and those ofbad companies arecalled“value stocks.” Let’s considerfor a moment, Wal-Martand Kmart. The formeris finan- cially healthyand universallyadmired, ... withlegendary management, a steadily growing stream of earnings, and a hugepileof cash on hand for emergencies. The latterisasick puppy, having recently declaredbankruptcy due to marginal fi...

Ngày tải lên: 20/06/2014, 20:20

... was the result of a massive collaborative effort to collect and analyze stock and bond prices. As researchers began to examine the aggregate performance of stocks and bonds, it was only natural ... each year. This is the best-case scenario for active- ly managed mutual funds—turn your portfolio over once a year, and you might—just might—match the index. And that’s before taxes. In a...

Ngày tải lên: 20/06/2014, 20:20

... value each year as capital gains. Fortunately, there are now “tax-efficient” index funds designed for taxable accounts, which are generally able to avoid capital gains. In 1999, Vanguard created ... unnecessary capital gains and resultant taxes. For the taxable investor, indexing means never having to pay the tax and investment consequences of a bad manager. Why Can’t I Just Buy and Hol...

Ngày tải lên: 20/06/2014, 20:20

... the roads and public safety made travel a danger- ous, slow, and extremely uncomfortable endeavor. At a stroke, the railroads made overland travel cheap, safe, rapid, and relatively comfortable. ... financial chaos of Paris arrived a most extraordinary Scotsman: John Law. After escaping the hangman for killing a man in a 1694 duel, he studied the banking system in Amsterdam and ev...

Ngày tải lên: 20/06/2014, 20:20