Quote for the Week
Three parts of investment policy are important:
- Deciding the right asset mix for the particular investment fund.
- Accepting and working with the reality that each investor’s long-term gross returns for each asset class will very likely be “average” for that asset class — minus manager fees, taxes, and so on — and accepting the corollary reality that underperforming is much more likely than outperforming.
- Sustaining policy commitments at market highs and at market lows, exactly when that rascal Mr. Market is doing his very best to do his worst.
The reality is that “roughly right” is all we can ever hope for on long-term asset mix, because even the most sophisticated investors must make their judgments on the basis not of facts, but on probabilistic estimates of two great uncertainties, markets and human reactions to markets, and without knowing the consequential leads and lags that will surely be part of the real world. — Charles Ellis (source)
From the Archives
Last Call
- Marks Memo: Easy Money – Oaktree
- 2023: The Year in Charts – C. Bilello
- Data Update 1 for 2024: The Data Speaks, But What is it Saying? – Musings on Markets
- 12 Lessons the Market Taught Investors in 2023 – L. Swedroe
- Forecasting Follies 2024 – Better Letter
- Risk Depends On The Resolution – Moontower
- Reflections: The Lessons of 2023 – Alchemy of Money
- At the Money: Investor Incompetence (podcast) – B. Ritholtz
- How Many Times Must You Fold a Paper to Reach the Moon? – Big Think
- Building Apollo – Construction Physics