Because I love wading in the thick of it I ask how do you justify your investment strategy? Is all you need to support your lifestyle? Is it minimizing risk and what is risk related to investing?
My justification for my investment strategy is that it allows me to maximize asset accumulation and minimizes risk. Risk is the failure to maximize the return on your investments taking into consideration your ability to replace anything you lose before you absolutely need it.
How does investing in bonds over a 20 period reduce risk? I would maintain that it doesn't. You are likely to have a smaller portfolio if you use the past as your guide. You risked potential returns in exchange for a smoother trip.
I have outperformed the market in 10 of the 11 years I have been invested solely in individual companies. Cumulatively I am up 340% versus a 5% rise in the S&P 500 over the 11 years. Investing in bonds would have greatly increased my risk.
I have no trouble holding 20% in a single security I understand completely. I regularly have companies that start as 10% of my portfolio grow to more than 20%. At no time do I hold more than 15 companies. I can't actively follow any more than this.
I limit my risk by favoring companies that have huge amounts of current assets or better yet hidden assets. I also invest in a small number of select companies that have more of a growth tilt. I don't limit myself by market cap, industry or any other characteristic other than they be a US company. Living near the Canadian Border I treat Canada as the same as the US and have considered Canadian Companies, but have yet to own one.
I have never owned an internet company, but have owned companies in exciting industries like mattress fabric, coal crushing equipment, fish farming and a number of companies that have large holdings of raw land.
My portfolio has achieved my objective of maximizing my return while minimizing my risk of failing to generate the largest amount I can.
My justification for my investment strategy is that it allows me to maximize asset accumulation and minimizes risk. Risk is the failure to maximize the return on your investments taking into consideration your ability to replace anything you lose before you absolutely need it.
How does investing in bonds over a 20 period reduce risk? I would maintain that it doesn't. You are likely to have a smaller portfolio if you use the past as your guide. You risked potential returns in exchange for a smoother trip.
I have outperformed the market in 10 of the 11 years I have been invested solely in individual companies. Cumulatively I am up 340% versus a 5% rise in the S&P 500 over the 11 years. Investing in bonds would have greatly increased my risk.
I have no trouble holding 20% in a single security I understand completely. I regularly have companies that start as 10% of my portfolio grow to more than 20%. At no time do I hold more than 15 companies. I can't actively follow any more than this.
I limit my risk by favoring companies that have huge amounts of current assets or better yet hidden assets. I also invest in a small number of select companies that have more of a growth tilt. I don't limit myself by market cap, industry or any other characteristic other than they be a US company. Living near the Canadian Border I treat Canada as the same as the US and have considered Canadian Companies, but have yet to own one.
I have never owned an internet company, but have owned companies in exciting industries like mattress fabric, coal crushing equipment, fish farming and a number of companies that have large holdings of raw land.
My portfolio has achieved my objective of maximizing my return while minimizing my risk of failing to generate the largest amount I can.