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Subject:  Re: How much to expect Date:  8/26/2019  7:36 PM
Author:  addedupon Number:  6987 of 7015

FWIW, I'll suggest 3 options for the relatively passive investor, all of which i am considering for my heirs when i am long gone, which won't be that long from now.

My story has quite a bit in common with Saul's. My returns are less impressive over a shorter time period though still excellent, 20%+ compounded annually over 20 years, and i began my retirement a decade later at 52.

I don't trust money managers so I'm looking at these 3 options for the family when i can't do this anymore.

Option #1. Load everything in the S&P 500 or other large cap indexes. For example, VOO. Dividend is 2% and principle will increase or decrease with the general market.

Warren Buffett has pretty well demonstrated that very few mutual funds can outperform the general market. Most mutual funds feel the need to be highly diversified, which means they invest in the entire market. The 1.5% expense fee makes your return nearly impossible to beat the market for any 5 year period.

Still, there are risks here to principle in the case of a prolonged downturn.

Option #2. The Dalio All-Weather Fund. Seems superior to option #1 to me, as it better ensures near market returns over a longer term and regardless of timing of market undulations. You can look it up but it is roughly a combination of the general market, a larger allocation of shorter and longer term bonds than you might expect, and small allocations of gold and commodities.

Option #3 A little more complex and the eone to which i am currently leaning of my own concoction. A fairly equal distribution of 5 ETFs, one mutual fund i like in AKREX, and BRKB. The 5 ETFs are VUG, VWO, MTUM, VTIP, and EDV(or TLT). It is my belief that this combination would outperform under most market conditions.

Hope this helps.

Disclaimer: I am no pro or expert on these macro issues.

My predictions on macro trends is average, and my understanding of technicals is poor.

My main edge over time has been picking individual stocks by identifying exceptionally capable, shareholder friendly leaders.

Growth or value companies, early stage or late stage, all are options for me. Of course it is more rewarding to find unrecognized genius in early stage stocks.

Companies tend to grow or shrink to the size of their leadership, almost regardless of products and markets. Outstanding leaders change products and markets when necessary. They move to where the TAM is going.

But capable leadership, while necessary, is not sufficient. They must deeply value their fiduciary responsibility to all shareholders. Where executive comp or SBC is excessive, i avoid those stocks.
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