June 14, 2016
Most U.S. investors are making this big mistake
One of the biggest mistakes an investor can make is overweighting a single asset, but that’s what most U.S. investors are doing right now, according to analysts.
Not sure that is a big mistake. Overweighting a single asset class allowed me to retire early.
Meb Faber, co-founder and chief investment officer at Cambria Investment Management, said that a majority of U.S. investors are too concentrated in domestic equities.
Although I don't own stocks any longer, I do know that stocks only go up. Everyone knows it. It's common knowledge, again. Don't let my sarcastic tone fool you. I have the utmost confidence in future returns from here, as long as I'm not required to back my words with my own money. Hey, is there a way I could back my words with other people's money?
“Managed futures funds are great to protect portfolios at times of stress, but they also tend to perform poorly in sideways markets. Managed futures funds that charge reasonable fees—between 1%-1.5% would be a good option to smooth out wild rides in the portfolio,” Faber said.
I might be making a big mistake here, but cash protects my portfolio in times of stress, and also tends to perform poorly in sideways markets. Perhaps I just need to find a manager who will manage my cash while charging me small fees? Or should I just continue to park it in an online savings account that pays at least some interest?
I bring it up because it will be a cold day in hell before I invest in a managed futures fund. If I wanted to pay someone else to gamble on zero-sum games with my money, games in which for every winner there must be a loser, then I'd be living in Las Vegas and using past performance to find the luckiest roulette table players. But hey, maybe that's just me.
So what actually was my biggest mistake today?
I read the comments of this article. Not only is GDFGDF DFDSGSDGFD nearly as prolific as I am, he/she has also mastered the use of UPPERCASE. Let me offer one small excerpt from just one of the many comments (out of 15).
ТHE R1CH РE0РLE АND C0MРАN1ES N0W H0LD А L0Т 0F SHАRES - F0R EXАMРLE 1F HYР0ТHEТ1CАLLY 1Т WАS 50 - 50 BEF0RE ТHE LАSТ BUYBАCK - ТHEN S0ME 10 ТR1LL10NS 0UТ 0F 20 1N USА 0UТ 0F 20 - ТHEN W1ТH S0ME 7 АND M0RE BUYBАCK ТHEY H0LD H1GH SHАRE 0F EQU1ТY. 1F EQU1ТY G0ES D0WN 0R ТHEY SТАRТ Т0 SELL ТHE РR1CE W1LL DECL1NE FАSТ. WH0 W1LL SECURE FURТHER BUYBАCK АS S0ME РR1VАТE B0NDS Y1ELDS 1NCREАSE АND ТHEE АRE N0Т MUCH FL0АТ1NG SHАRES 0N ТHE MАRKEТ SUРР0SEDLY - WH0 W1LL GEТ 1N 1RRАТ10NАL EXUBERАNCE FURТHER АS ТHE РR0F1ТS DECL1NE F0R SEVERАL QUАRТERS АLREАDY АND ТHE РR0SРECТS АRE F0R M0RE ТHEN 10 YEАRS RECESS10N 1N EU АND USА.
If you have made it this far into this post and are still reading, then I offer you a sincere apology. We will never get this time back, and as they say, time is money. It has been our biggest mistake today. ;)
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