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The Simple Path to Wealth, Talks at Google, JL Collins

nfwyt, quest-for-wealth1 min read

JL Collins

  • Index returns(ETF) out performs 80-85 % of active mf managers in 15yr period. In 30yrs, number active mf managers who can out perform index is less than 80%

  • Indexing gives best performance in long shot(15-20 years). The stocks in the index are self cleansing over period of time, they are being actively looked at by industry experts. There is a saying, if you buy ETFs, you cannot beat the market but index funds are for long term not short terms.

  • JLs recommended index fund Vanguard Total Stock Market Index Fund Admiral Shares(VTSAX). S&P 500 amd VTASX are surprisingly close, so one don't have to spend time in deciding which one to go for.

  • Look out for index funds and very specifically broad-based stock index funds and broad based bond index funds like for example(VTSAX and VBTLX)

  • (401)k is not a investment, IRA is not a investment, TSP plan is not a investment, i call those as buckets, where you hold your investments. Investments are stocks, bonds amd mutual funds. Index funds has the lowest expense ratio.

  • Fidelity did a reasearch and found out one group of investors who performed very well in their funds as usually people underperform by dancing in and out and timing the market. People who performed well were dead people.

  • If you are investing, you have to expect volatility and you have to live with it. Stocks could be crashing now or 10 yrs from now.

Time in the market is more powerful than trying to time the market.

  • Don't panic and sell at the bottom.

  • Currently, my investment allocation is 30% bonds and 70% stocks. When market crashes that percent of bonds go up and you start selling bonds and when stocks come up you have sell some stocks to replenish the the bonds. Bonds don't give returns in long term but they are their to just support the volatility of the market.

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