Notes:-The next 30 years will be a much more difficult investing environment than the last 30 years.
-The world's financial assets = 60% Stocks & 40% Bonds.
-Indexing owns everything (the market), and tries to control fees and taxes. Nothing wrong with being an active/indexer.
-Stocks carry much higher permanent loss risk (85-90% of Draw Down risk comes from Stocks).
-Low single digit returns will be the norm for almost all asset classes.
-Stay away from Foreign Bonds, especially Euro High Yield Bonds.
-Presently Foreign Stocks (Developed and Emerging) are better valued today compared to US Equities.
-Bonds should serve the role of hedging equity risk in a portfolio- control stock risk.
-Bonds need to provide uncorrelated returns when the equity markets sell off - US Treasuries are the best choice.
-US Treasury Bonds are the safest bond because of the "safe income" that is derived from the US Equity Market (that the government taxes and passes through to bond holders), not because of the "faith of the US Government".
-Own10 year UST Bond duration or longer for permanent loss protection on your equities.
-Buy a cheap indexed Broad US Treasury Bond Index from Vanguard, Schwab, Fidelity, etc. - simple and cheap.
-Deflation or dis-inflation - will continue due to low wages, older populations, and technology - will be with us longer.
-Commodities look attractive (cost inputs) from the perspective of uncorrelated returns (crisis alpha)...gold, same thing.
-Don't rely on the Financial Market to get rich (grow your wealth)...be the capitalist class...be the owner...run a business that compensates you for your expertise
-State Munis may have principle risk (defaults) and may not provide the same portfolio protection as US Treasuries
-Interest rates - "Lower for Longer", because growth will be slow.
