As briefly mentioned twice earlier, it is tempting, when looking at the ups and downs of the market, to try to time the business cycle so that you buy stocks after a crash when they are cheap, and then sell them after a long bull run, when they are much more expensive.
It sounds like a great idea, doesn’t it? Like surfing: wait for a perfect wave that is about to break, and off you go!
I decided to bypass Amazon and buy a Terror House ebook direct from their store. I had to get instructions from Matt on how to get it onto my Kindle.
At first he thought I was joking but then, when I insisted that I was serious, he gave me the steps with palpable embarrassment.
Turns out it’s easy: download the file, send it to your Kindle email address (they all have one), perhaps fiddle with one last thing if required, and there it is.
I always bought ebooks via Amazon because that’s all I knew. Go to the Kindle store, search, press the ‘buy’ button.
In fact, I didn’t even know that you could read non-Amazon books on Kindle. I’d wondered about it but never actually tried it. You can read anything on those. If a mate sends you a manuscript as a Word doc, you can forward it to the Kindle to read there – much easier on the eyes. You can copy and paste long articles from the onlines, too.
Of course, Amazon could still reach into your device while the WiFi’s connected and delete anything they find objectionable but I’m not too worried about that at the moment and can’t physically obtain or store paper books right now anyway. I know others are building paper libraries and that’s a good idea.
Probably all this has not taught my reader anything he didn’t already know, but the anecdote may illustrate something interesting: consumer inertia.
By the late Roman period, landlords had become so wealthy and powerful that they refused to allow their workers to be recruited into the legions. Instead, they sought security from barbarian warlords.
Thus the feudal period began.
In the era of the Roman Republic, many farmers were yeoman with the rights and responsibilities of free men. They were gradually replaced by slaves conquered from foreign wars and the relative power and wealth of the aristocracy increased. By the end of the Empire, ordinary peasants had become serfs. They were forced to work for their lord and were not allowed to leave the manor. The average person never ventured more than ten kilometers or so from his village. A few managed to remake themselves by escaping to a town and learning a trade but most would not improve their station until the Black Death made labour scarce and workers in high demand.
The division of labour in society has changed several times since then and right now it is changing again.
It seems likely that instead of having a large middle class as in the post-war years, we will be divided into two new classes. These nascent castes have already begun to form and my reader probably knows which one he belongs to. It’s easy to make predictions about things that are already happening.
At Amazon, machines are often the boss—hiring, rating and firing millions of people with little or no human oversight.
Remember a little while back, we were discussing how you may need a mix of bonds and shares? Well, some of those index funds can help you to do it. Rather than, say, putting 30% of your money into a bonds index fund and 70% into a share market index fund, you might find that there is a ‘balanced’ or ‘diversified’ fund available that already diversifies in this way for you. Such diversified funds might also include some cash or equivalents, real estate, or other investments.
There is an old piece of advice that says, ‘invest in what you know’. For example, if you happen to be a mad keen aviation enthusiast who goes to the airport to take photos of your favorite airplanes taking off, maybe you would be better placed than the average person to know which major aviation companies to invest in.
If you’ve poked your head out of the cave lately, you’ll have noticed a pattern.
Our rulers want to change our lives.
They suddenly want us to eat bugs, live in pods, refrain from eating beef, enjoy our lack of privacy and own less stuff. They also want us to travel less, especially in Australia where travel for most is banned.
It’s Woke, global warming, Covid and WEF nonsense rolled into a single, unified campaign against the common man.
Who stands to benefit from us eating bugs? Who wins by stopping us from flying to Bali for a holiday?
In terms of absolute monetary benefit, no one. There’s not much money in marketing bug burgers or renting out bungalows at Bonnie Doon.
There is such a thing as too much diversification due to the law of diminishing returns. If you are picking shares, two stocks are immensely better than one. Three is better yet, but not by as much, and this pattern continues for the fourth, fifth, sixth and so on. Once you’ve got twenty stocks, you’ve reduced your risk by about 70%, and any more stocks over and above that do little more than take up your time and effort to keep track of. Also, with over twenty stocks your return is so diversified that it will likely mirror the index funds – so why bother? Buy the index fund and be done with it. Which is what I recommended anyway.
Everyone thinks they want to be free but aside from a pet preference here and there they don’t, really.
Not in comparison to their desire for material comfort, social approval and above all else, safety.
In the West, few of us wanted our rights enough to fight for them. Others fought on our behalf. The nobles fought the King, the petty bourgeoisie fought the aristocracy, a few union rabble rousers fought the capitalists, a tiny minority of feminists fought the patriarchy. Much of the battle for racial equality was fought on behalf of others.
Most Americans in the Thirteen Colonies did not fight in the War of Independence and it is unclear what percentage of them supported it. Most women never campaigned for equal rights. Most ordinary, landless men did nothing personally to further their case to receive the vote or gain individual freedoms.
For that matter, the slaves of the British Empire and the United States did not fight to free themselves. They, to, were emancipated by others.
It was all thrust upon us unbidden.
Sure, most will vote for freedom when it’s all organized for us and there’s an option on the ballot. That’s about the extent of the average person’s dedication, though.
As you saw in the box, there are a vast array of funds offered by Vanguard in some places. However, you’ll only need one or two of these funds to achieve all the share market diversification you need, plus perhaps a bond index fund as discussed earlier. Ignore all the weird and wonderful specialty funds.
Should you diversify your shares by investing in overseas stock markets, or stick with those in your own country? For example, take Steve, an Australian investor. Should he invest entirely in the Australian Shares Fund (which tracks the ASX 300), or should he also have some exposure to the International Shares Fund (which tracks several major indexes for overseas stock markets)?
This article examines the antics of five athletes to synthesize a grand unified theory of why the Olympics are cactus.
I’m old enough to remember the Sydney 2000 Olympics. It was a special time – just about all Australians were proud to have it and hoped to put on a really good show for the world.
Do you remember Eric the Eel? He had no Olympic-sized pool back in Equatorial Guinea to train in so he almost drowned. The crowd cheered him on wildly and he just made the distance. Unkind people thought we were being racist and/or condescending but far from it – we genuinely admired his spirit. The balls of the guy, to even make the attempt! That is the Olympic spirit.
I have nothing against the concept of the Olympics. The world’s greatest sportsmen gathering every four years to compete in peace and friendship. Going back the Greeks, it was a triumph of human creativity and abstract reasoning to put aside conflict for a couple of weeks, enjoy the show and perhaps imagine a better world.
What killed the Olympics? Various things. Cheating, politics (i.e. banning Russia), IOC corruption, professionalism, corporate sponsorship, cost overruns, white elephant stadiums. No doubt there are more. The Olympic spirit has been dying for decades. Why cheer drugged-up pros who are playing for millions of dollars? Give us the good old days of mustachioed, pot-bellied accountants stopping for a fag and a dram of whisky as they run the 1896 marathon wearing hats and bow ties.
There’s an unofficial trilogy about Russia’s prison camps.
The first, The House of the Dead, is Dostoevsky’s fictionalized memoir of his years in a Siberian labour camp during the days of the Tsar.
The second, Gulag Archipelago by Solzhenitsyn, documents through secretly collected personal accounts the massive expansion of this system for supposed political prisoners during the dark years of the early Soviet state. I’m partway through and it’s clear that at this stage the camps are far worse, and far less logical, than in Dostoevsky’s time.
Today I’ll review the third: Bukovsky’s testimony about the Soviet imprisonment of dissidents during the post-Stalin era.
An index fund, sometimes called a ‘passively managed fund’, is another type of mutual fund like an actively managed fund except that instead of a hopefully clever human, an algorithm does the investing for you. It blindly invests in the whole market, attempting to track a stock market index . . .
We all know the cliche about absolute power corrupting absolutely but we think about it too little.
That’s the thing about cliches. In general they are true but overused so we tend to ignore them.
I’m currently re-listening to The History of Rome Podcast. I’m up to the Crisis of the Third Century when emperors are barely lasting a year on average. Each time a new fellow makes a treacherous grab for the purple we wonder, ‘Why?’ Few of them had a bold plan for rescuing the Empire. Most just wanted power for its own sake, despite the danger of holding the throne being greater than that for 1960s cosmonauts.
Today, it’s hard for us to understand the allure of power because in our society there are no comparable positions. For example, the few times I’ve had a position of responsibility thrust upon me it’s been the rock-and-hard-place situation perhaps familiar to my readers: I cop all the accountability of getting a project finished by the deadline without any of the authority to force people to do things they don’t want to do, like complete their part of the project.
That’s as close as we get to power in modern times. As Eisenhower said, in the military you pick up the phone and issue orders confident they’ll be carried out instantly and to the letter; as president you bark orders down the phone and nothing happens.
There are some managed funds that endeavor to match your values. These are generally known as ‘ethical investment funds’.
Some avoid investing in things you don’t like such as weapons, tobacco, abortion services, alcohol, gambling, carbon-emitting industries, genetically engineering crops, or whatever. This is called ‘negative screening’. Others actively seek out companies doing things you approve of like developing clean energy or being socially responsible. This is called ‘positive screening.’ [i] There are some funds that do both.
Alt-lit is like a rock band’s first album. Brimming with raw energy, uninhibited, ready to take on the world. The band’s second record gets professionally produced and is much more polished – critics usually proclaim the second or third album the best – and yet many fans will declare the initial, rough recording their favourite.
Alt novel Into the Vortex is more like a second album, written in effortless, self-assured prose with nary an awkward simile or clumsy wording as we expect when venturing away from Penguin.
I assumed this was not Brian’s first rodeo but was surprised to see that according to his website, this is his maiden book. Either he has precocious talent or a brilliant editor. Perhaps both.
[Edit: the website seems to have been suspended. Alt cred recognized.]
Edit: Book-exclusive content discusses what percentage of your money might go towards cash, bonds and shares depending on your personality and risk profile. What follows are concrete examples to show how that can work.
Some Sample Asset Allocation Strategies
This is for someone who has recently started working, is not risk averse and who is saving for retirement in the distant future: