On Fridays I answer your questions! I’ll answer any question you ask me.
Today, we discuss:
- How would I protect my investments from a bear market?
- How would I invest the money I’m saving for a house downpayment?
- What financial advice would I give an 18y.o. me?
- What’s the most complicated thing in my day?
- What are my thoughts about the book “The Millionaire Fastlane?”
Next week I’ll be interviewing:
If you have questions you’d like me to ask them, please tweet them to me or email them to me! I’ll do my best to fit them in.
— Radical Finance Show (@RadicalPF) July 10, 2014
Questions for today:
Short answers are:
- The steps congruent with my investment strategy.
- Before investing any money.
This is the wrong question to ask. You have to understand what your strategy is before the bear market comes. Markets are schizophrenic. And understanding your strategy will allow you to already know what you’re going to do. There are few strategies I know of that should be adjusted in a bear market. This is what you see when you study sophisticated portfolio management. You can make tons of money in a bear market. Managers often do it. You can make money going up or going down. Discussion of:
- Investing in passive index funds through a bear market.
- Investing in active mutual funds through a bear market.
- Trading your way through a bear market.
- Strategies of stock mutual fund managers (value managers, growth managers, top-down managers, bottom-up managers).
- Hedge fund trading strategies and techniques. Consider reading: “The Fund Industry” by Robert Pozen and Theresa Hamacher
- Using options/orders/etc. for your own stocks.
- Ignoring the bear market completely and just sitting tight and enjoying your dividends. (E.g., Walton Family, Bill & Melinda Gates Foundation, Coca-Cola heirs, etc.)
- All of this doesn’t mean that you don’t sell investments. It does mean that it’s not just because of the fear of a bear market.
- Trust your managers.
- There is no investment that matches what you’re trying to do because of short-term volatility and the importance of time returns on compound interest.
- There are strategies that you could implement though that would make a world of difference. (They’re very personal.)
- Invest in yourself and your ideas first and then look for a strategy that will work faster than what is mainstream.
@JoshuaSheats my question is what is the most complicated thing in your day?
— Miriam Ortiz y Pino (@moypmto) July 9, 2014
- Trying to figure out how to take extremely complex, detailed information and make it interesting, simple, and relevant for laypeople.
- I think I liked it a lot…if memory is correct, the strategies he lays out line up with my own observation. But I’ll re-read it and report back.
Thanks for all the questions! I had fun answering them!
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