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The Risk of Being Overconfident

InvestorInvestor
edited April 2013 in Off-Topic
http://advisors.morningstar.com/advisor/t/73262563/the-risk-of-being-overconfident.htm

"The best investors talk about being keenly aware of what they know and don’t know. Mediocre or dishonest investors pretend they know. Bad investors don’t even know they don’t know."

"An investor can guarantee an above-average return by owning the marketweighted portfolio at a low cost. What does this portfolio look like? Doeswijk, Lam, and Swinkels (2012) estimate the total world market portfolio as of the end of 2011 was about 55% fixed income, 35% equities, and 10% alternatives. Because most alternatives— hedge funds, private equity, and so forth—repackage equity risk, the portfolio can be approximated by a 50%/50% stock/ bond allocation."

Comments

  • beebee
    edited April 2013
    ... 50% VT (Vanguard Total World Stock Index) and 50% BND (Vanguard Total Bond Market)...call it good!
  • Old_JoeOld_Joe
    Well, I know that I don't know, but I don't know exactly what it is that I don't know, except that it's most likely stuff that I should know.
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