Quote:
Originally Posted by Jeff Lebowski
Actually, the biggest mistake I have made is being too aggressive with my investments. Oh, the money I have lost....
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I should qualify my statement.
Biggest mistake meaning too much money in fixed income (T-bills, bonds, etc.).
With age expectancy into the 80's and probably into the 90's for people of my age, even at retirement age, people are still on a long horizon.
The typical advice of a guy like me in my 30's putting 30% into fixed income is totally nuts, IMHO. Or someone in their 50's moving to 50%+ in fixed income--too conservative.
But once you determine your portfolio allocation, i.e. x% in fixed income, x% in stocks, x% in real estate, whatever, then you diversify to fullest extent to lower risk within your asset class and crosswise across other asset classes.
So when I say be aggressive, I mean put more money into stocks than bonds.
Buying one stock is order of magnitude more risky than buying an index fund (which I would call high risk). Leveraging a real estate purchase is order of magnitude more risky than buying one stock. And giving money to your brother-in-law as his financial partner for his business idea is order of magnitude more risky than the real estate purchase. This kind of aggressiveness is not what I'm talking about.