In this episode, Mark talks about how in a rising interest rate environment bonds will be worse to own than stocks. mutual funds own great business but they are opaque and access to information is not available until later. He also talks about closed end mutual fund; open ended mutual fund. Mark also discusses an article that says, “adding new mutual funds is way easier than reorganizing your portfolio”. How many mutual funds should you have? If you have more than 8 mutual funds chances are you need to do some serious portfolio cleaning. A mutual fund is a diversified portfolio of investments. Spread risk out in an asset class. Under asset allocating is not having an allocation strategy that goes along with your goals. "In order for your portfolio to be successful you should be invested in domestic and foreign stock funds, fixed income funds”. Blend of the concept of asset allocation and diversification. If you are retired you need to asset allocate so you have greater withdrawal for when you need money. Your asset allocation determines how volatile your investment portfolio is. Risk is a function of how much you own of each asset. Investors are short term thinkers. Stock movements are coming from computer movement.
June 14, 2017