“Furniture in every room of the house? Took 3 years after moving in.” - Jim Dahle, M.D.
General observations only. Does not constitute tax, legal, or investment advice. Full disclaimer.
“Ideally, a fine painting, like a house, is neither a speculation nor an investment; it is a purchase. Its value consists solely of the pleasure and utility it provides now and in the future. The dividend the painting provides is of the non-financial variety.” - William Bernstein, M.D.
“If cycling seems expensive, try home improvements. If home improvements seem expensive, try boating. If boating seems expensive, try private school. Before long you’ll be living paycheck to paycheck on $400,000 per year. Learning to be content with cheap hobbies can go a long way.” - Jim Dahle, M.D.
“What passive index gives you “6-7%?” My passive index funds gives me 25%, 2%, -6%, 12%, 4%, -18% etc. It might average out around 7%, but I certainly don’t expect that in any given year as it is actually a very rare year I get that exact return. - Jim Dahle, M.D.
“Getting” [7% return] implies that you know what your future returns are going to be. I would argue you have no idea what your future returns will be. Impossible to predict in the short term and at best a range of predictable outcomes in the long run (and the range is far wider than 1%).” - Jim Dahle, M.D.
"Always remember that the more exciting a given stock or asset class is, the more likely it is to be over-owned, overpriced, and destined for low future returns." - William Bernstein, M.D.
“Start by saving 15% of your salary at age 25 into a 401(k) plan, an IRA, or a taxable account. Put it into just three different mutual funds: A US total stock market index fund; An international total stock market index fund; and a U.S. total bond market index fund." - William Bernstein, M.D.
“Someone with a physician (or dentist) level of income can free themselves from their practice in just a decade or two by simply controlling their lifestyle, saving a bunch of money, and investing it in some low-cost, broadly diversified index funds, both inside and outside retirement accounts.” - Jim Dahle, M.D.
“Use a static asset allocation. Use index funds. Steadily and intelligently investing a portion of your income is an almost sure, even if slow, path to wealth.” - Jim Dahle, M.D.
“Stocks are risky. While the worst year for a 100 percent stock portfolio was a 43.1 percent loss, that understates the way a loss feels. That figure comes from the loss from Jan. 1 to Dec. 31, not the peak-to-trough, which is the percentage decline from the fund’s highest net asset value (peak) to the lowest net asset value (trough) after the peak.” - Jim Dahle, M.D.
"From the market peak in September 1929 to the bottom in July 1932, the market lost an astonishing 83%." - William Bernstein, M.D.
“In 2008, the US stock market lost 37.1 percent. However, the peak-to-trough loss was -48.4 percent. It was even worse if you extend the period to the bear market bottom in March 2009 (-52.9 percent).” - Jim Dahle, M.D.
“A Target Retirement Fund is a fund of other mutual funds set on autopilot (from the employee’s perspective) to automatically rebalance and shift its holdings over time into and beyond retirement. Every large mutual fund company has created this type of fund.” - Joshua Lerner, M.D.
“Lifecycle funds, just put your 15% of your salary, 20% of your salary into that every month, and don’t ever look at your brokerage statement, don’t ever look at your financial statement. That’s the way to do it.” - William Bernstein, M.D.
“Your gradual transition from a 75% stock portfolio to a 25% stock portfolio doesn’t have to occur in an even manner. It’s okay to reduce the risk level using broad strokes, especially after a good year or two.” - Jim Dahle, M.D.
“The vast majority of my portfolio is invested in traditional low-cost, broadly-diversified index mutual funds and their exchange traded fund (ETF) equivalents.” - Jim Dahle, M.D.
“If the name of your mutual fund does not have one or more of the following words in it: Vanguard, DFA, TSP, Index you probably shouldn’t buy it. That doesn’t mean that any fund with one of these words in it is a good fund, nor that every fund without one of these words is a bad fund, but it’s a pretty darn good first screen.” - Jim Dahle, M.D.
“Investment Selection. You should use one low-cost total stock market index mutual fund and one low-cost total bond market index mutual fund.” - Jim Dahle, M.D.
“You should invest only in vehicles that are passive and that have the lowest possible fees.” - William Bernstein, M.D.
“Costs matter and they matter a lot: If two investors make the same 8% per year before expenses on a lump sum investment and the first is paying 2% per year in investment expenses and the second is paying 0.1% per year, then after thirty years the second investor will have 70% more money than the first.” – Jim Dahle, M.D.