Single Most Valuable Thing

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Howard Donnelly
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Single Most Valuable Thing

Post by Howard Donnelly » Fri Mar 23, 2012 8:51 pm

What is the single most valuable thing you have learned from studying the Boglehead investing philosophy?

Johm221122
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Re: Single Most Valuable Thing

Post by Johm221122 » Fri Mar 23, 2012 9:06 pm

Stay the course,pick investment policy to fit your situation and turn off the noise

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bob90245
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Re: Single Most Valuable Thing

Post by bob90245 » Fri Mar 23, 2012 9:11 pm

Do-it-yourself investing is not for the faint of heart. Bogleheads are a unique minority.
Ignore the market noise. Keep to your rebalancing schedule whether that is semi-annual, annual or trigger bands.

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Index Fan
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Re: Single Most Valuable Thing

Post by Index Fan » Fri Mar 23, 2012 10:08 pm

Keep expenses low- you keep far more of your earnings over the long haul that way.
"Optimum est pati quod emendare non possis." | -Seneca

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momar
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Re: Single Most Valuable Thing

Post by momar » Fri Mar 23, 2012 10:40 pm

I had already been trending towards it, but the fact that for a very significant part of one's life, savings rate is far more important than return.

I mean, I knew that intuitively, but more and more it becomes clear that it is for a long time. A lot longer than most think. And even when the portfolio gets pretty big, the savings rate remains a really significant part of any increase in wealth until it gets REALLY big.
"Index funds have a place in your portfolio, but you'll never beat the index with them." - Words of wisdom from a Fidelity rep

Hatch Batten
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Re: Single Most Valuable Thing

Post by Hatch Batten » Fri Mar 23, 2012 10:44 pm

Larry Swedroe's insights on managing tail risk.

Default User BR
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Re: Single Most Valuable Thing

Post by Default User BR » Fri Mar 23, 2012 11:52 pm

Philosophy? Probably nothing. I had already arrived there from reading Swedroe, Bernstein, Merriman, etc. I have learned useful tips and techniques here. The biggest being the after-tax/in-service rollover from 401(k) deal.


Brian

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SimpleGift
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Re: Single Most Valuable Thing

Post by SimpleGift » Sat Mar 24, 2012 12:11 am

Doing nothing with your investments is generally much more profitable than doing something.
Cordially, Todd

pdc3610
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Re: Single Most Valuable Thing

Post by pdc3610 » Sat Mar 24, 2012 12:58 am

Simplegift wrote:Doing nothing with your investments is generally much more profitable than doing something.


Reminds me of a seasoned physician teaching a young medical student. Two of the most important rules of medicine are:
1. Do nothing stupid.
2. Do nothing, stupid.

Simple, but carries a lot of truth.

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norookie
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Re: Single Most Valuable Thing

Post by norookie » Sat Mar 24, 2012 1:10 am

:mrgreen: Pick your strategy, follow it, and my personally dated 1733 Atocha coin. Harvested by a friend. :wink:
" Wealth usually leads to excess " Cicero 55 b.c

lawman3966
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Challenging Authority

Post by lawman3966 » Sat Mar 24, 2012 1:37 am

Most importantly, I have learned to challenge authority.

What made this all possible was the radicalism of Jack Bogle. I use the word "radicalism" because in essence what Jack Bogle did was to "challenge authority", in particular the authority of the financial advising industry. I find myself extending this concept into other areas, in that I now always try to look for the angle/interests of anyone selling me anything, from politicians to insurance salesmen.

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Noobvestor
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Re: Single Most Valuable Thing

Post by Noobvestor » Sat Mar 24, 2012 2:01 am

Diversification is the only free lunch.
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe

Scandinavian
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Re: Single Most Valuable Thing

Post by Scandinavian » Sat Mar 24, 2012 4:27 am

Costs matters.

CrowTRobot
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Re: Single Most Valuable Thing

Post by CrowTRobot » Sat Mar 24, 2012 5:40 am

Scandinavian wrote:Costs matter.

+1

And how much they matter.

.....and how easy they are to avoid....(I'm looking at you loads, 12b-1 fees).

EDIT: OK. That might be three things; but I prefer to think of them as 1a, 1b, and 1c.

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NAVigator
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Re: Single Most Valuable Thing

Post by NAVigator » Sat Mar 24, 2012 5:58 am

I learned how to iinvest; asset classes, diversification, developing an investment plan (IPS), creating a single portfolio, and finally stay the course.

When I became disabled at 56 I was enabled to retire.

Jerry
"I was born with nothing and I have most of it left."

peppers
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Re: Single Most Valuable Thing

Post by peppers » Sat Mar 24, 2012 6:09 am

"Don't just do something, stand there". Love the quote. Thank you Mr. Bogle
"..the cavalry ain't comin' kid, you're on your own..."

sschullo
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Re: Single Most Valuable Thing

Post by sschullo » Sat Mar 24, 2012 6:14 am

Managing risk by knowing and accepting my limitations. Powerful stuff.
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

Muchtolearn
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Re: Single Most Valuable Thing

Post by Muchtolearn » Sat Mar 24, 2012 6:38 am

pdc3610 wrote:
Simplegift wrote:Doing nothing with your investments is generally much more profitable than doing something.


Reminds me of a seasoned physician teaching a young medical student. Two of the most important rules of medicine are:
1. Do nothing stupid.
2. Do nothing, stupid.

Simple, but carries a lot of truth.


I guess times have changed. THe first rule that I learned and taught was primum non cicera. First, do no harm.

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1210sda
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Re: Single Most Valuable Thing

Post by 1210sda » Sat Mar 24, 2012 7:18 am

Since Taylor hasn't posted yet, .........SIMPLICITY !!

1210

FinanceFun
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Re: Single Most Valuable Thing

Post by FinanceFun » Sat Mar 24, 2012 7:31 am

Manage what you can control - AA, Taxes, Costs

Accept that you cannot predict the future

Stay the course

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buzz4
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Re: Single Most Valuable Thing

Post by buzz4 » Sat Mar 24, 2012 7:54 am

Need, Ability, and Willingness to take risk.

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Rick Ferri
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Re: Single Most Valuable Thing

Post by Rick Ferri » Sat Mar 24, 2012 8:58 am

Help is free and it isn't far away.

Rick Ferri
The views expressed by Rick Ferri are strictly his own as a private investor and author and do not reflect the views of any entity or other persons.

Mortgasm
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Re: Single Most Valuable Thing

Post by Mortgasm » Sat Mar 24, 2012 9:01 am

We take it for granted, but I think for all of us the most important lesson is that active management is a loser.

ResNullius
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Re: Single Most Valuable Thing

Post by ResNullius » Sat Mar 24, 2012 9:09 am

Not to discuss politics on the Board.

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hoppy08520
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Re: Single Most Valuable Thing

Post by hoppy08520 » Sat Mar 24, 2012 9:18 am

CrowTRobot wrote:
Scandinavian wrote:Costs matter.

+1

And how much they matter.

.....and how easy they are to avoid....(I'm looking at you loads, 12b-1 fees).

EDIT: OK. That might be three things; but I prefer to think of them as 1a, 1b, and 1c.

+1

Before this site, I was aware of diversification and asset allocation (barely) and I believed in passively managed index funds over actively managed index funds because the "experts" often get it wrong.

But what I didn't realize was just how critical even half a percent is until I read more about it here and I crunched the numbers. To an ordinary person, the difference between 0.2% and, say, 0.85% or 0.07% is, well, indecipherable. I mean, we're taking just a few pennies, right? I put as much attention into these numbers as I did all the line-item fees and taxes in my phone bills. I was hardly even aware of these expense ratios.

So, what this site woke me up into doing was moving my entire 401k (half of my total portfolio) out of a 1.0 ER target date retirement fund into a Total US Stock Index Fund (0.57% ER) and using my other accounts (Roth and Traditional IRA and TSP) to make up the difference in a 3/4-Fund portfolio. Now that I'm aware that my 401k plan is mediocre, I'm also gently encouraging my employer to look at going to a better 401k provider.

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abuss368
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Re: Single Most Valuable Thing

Post by abuss368 » Sat Mar 24, 2012 9:27 am

I can not beat the market.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

tim1999
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Re: Single Most Valuable Thing

Post by tim1999 » Sat Mar 24, 2012 9:29 am

Costs matter.

bschultheis
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Re: Single Most Valuable Thing

Post by bschultheis » Sat Mar 24, 2012 10:12 am

momar wrote:I had already been trending towards it, but the fact that for a very significant part of one's life, savings rate is far more important than return.

I mean, I knew that intuitively, but more and more it becomes clear that it is for a long time. A lot longer than most think. And even when the portfolio gets pretty big, the savings rate remains a really significant part of any increase in wealth until it gets REALLY big.


Well said. Everyone wants to talk about small and value a lot more than they want to talk about saving.

Bill Schultheis

trico
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Re: Single Most Valuable Thing

Post by trico » Sat Mar 24, 2012 10:15 am

Don't give up no matter how bleak it looks.
by Tim Tebow

mcblum
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Re: Single Most Valuable Thing

Post by mcblum » Sat Mar 24, 2012 10:20 am

diversification and AA. as related to the investor's age
That there is help to the ignorant (my self) at all stages of life.
Marty

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Re: Single Most Valuable Thing

Post by travellight » Sat Mar 24, 2012 10:24 am

Help is free and it isn't far away.


+1

I knew most of the key elements intuitively, like saving and costs matter. The willingness to help and degree of expertise here for any specific issue/problem is really fantastic.

Dude2
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Re: Single Most Valuable Thing

Post by Dude2 » Sat Mar 24, 2012 10:37 am

The most valuable thing to me is the eye-opening message about how Wall Street operates such that the common Joe/Jane is trampled under their collective boot. Therefore, the fundamental lesson learned is that the best we can do is embrace total market concepts with low expense ratios, not listen to the media, and to stay the course. Further, the stock/bond allocation decision is paramount, eclipsing other asset allocation concerns.

JCom
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Re: Single Most Valuable Thing

Post by JCom » Sat Mar 24, 2012 10:48 am

For me, it was that I should be saving much more than the average American.

When I compare my savings rate to most everyone I know - well - it's typically much higher.

When I compare it to the people on this forum it is on par if not lower.

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camper
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Re: Single Most Valuable Thing

Post by camper » Sat Mar 24, 2012 10:57 am

I'm with momar and Mr. Schultheis. Saving rate is crucial.
My goal: "One day I might wake up and decide to call in "rich"!" :D ~posted by bhsince87

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FabLab
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Re: Single Most Valuable Thing

Post by FabLab » Sat Mar 24, 2012 11:39 am

This from Laura: consider the entirety of one's investments as a single, consolidated portfolio (e.g., TIAA-Cref, Vanguard, Fidelity, TSP, etc.).

Though I can't say this has been learned here, it certainly has been reinforced on the forum: saving is key and control your investment costs.

Cheers
The fundamental things apply as time goes by -- Herman Hupfeld

SheebaElwood
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Re: Single Most Valuable Thing

Post by SheebaElwood » Sat Mar 24, 2012 11:44 am

That people really don't know the difference between active management and market timing.
One of them beats the market with less risk. The other tends not to.
But, talking about the difference gets you banned.

brad_g
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Re: Single Most Valuable Thing

Post by brad_g » Sat Mar 24, 2012 11:46 am

Financial experts aren't.

Fallible
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Re: Single Most Valuable Thing

Post by Fallible » Sat Mar 24, 2012 1:44 pm

Howard Donnelly wrote:What is the single most valuable thing you have learned from studying the Boglehead investing philosophy?


There really were two equally valuable lessons I learned after first hearing about John Bogle, Vanguard, and indexing in the late '80s. One was how high costs and fees can ravage returns; the other was keeping investments simple so I could understand them and accept their risks.
Bogleheads® wiki | Investing Advice Inspired by Jack Bogle

stan1
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Re: Single Most Valuable Thing

Post by stan1 » Sat Mar 24, 2012 1:53 pm

Make a lot more money than you spend.

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grap0013
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Re: Single Most Valuable Thing

Post by grap0013 » Sat Mar 24, 2012 2:33 pm

Don't piss into the wind. Wait, I learned that somewhere else. :oops:

Save more. If I only save a penny/year, but I use all SCV and it doubles every 6 years...
There are no guarantees, only probabilities.

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VictoriaF
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Re: Single Most Valuable Thing

Post by VictoriaF » Sat Mar 24, 2012 2:51 pm

The most valuable thing I have learned from the Bogleheads' philosophy and specific discussions is that one can do much better investing on his or her own than with financial advisers.

The value of this knowledge is supported by two factors as follows:
1. Most returns (~90%) can be achieved with a very simple approach, e.g., a single balanced fund, or splitting the assets among broad-based low-cost index funds of U.S. bonds, U.S. stocks, and foreign stocks.
2. Any puzzling circumstances can be brought up in this open forum, and a free advice provided and critiqued by potentially hundreds of highly knowledgeable benevolent amateurs is more beneficial than a confidential advice provided by a biased professional.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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Taylor Larimore
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Different points of view ?

Post by Taylor Larimore » Sat Mar 24, 2012 3:01 pm

SheebaElwood wrote:That people really don't know the difference between active management and market timing.
One of them beats the market with less risk. The other tends not to.
But, talking about the difference gets you banned.


Hi SheebaElwood:

I have been a moderator for years and I assure you that talking about the difference between active management and market timing does NOT get you banned.

This forum encourages civil discussions of different points of view.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

pdc3610
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Re: Single Most Valuable Thing

Post by pdc3610 » Sat Mar 24, 2012 3:07 pm

Muchtolearn wrote:
pdc3610 wrote:
Simplegift wrote:Doing nothing with your investments is generally much more profitable than doing something.


Reminds me of a seasoned physician teaching a young medical student. Two of the most important rules of medicine are:
1. Do nothing stupid.
2. Do nothing, stupid.

Simple, but carries a lot of truth.


I guess times have changed. THe first rule that I learned and taught was primum non cicera. First, do no harm.


Muchtolearn: I believe these two phrases end up being the same concept. Harm is often caused by doing something stupid of by doing something when nothing was the better choice. I agree, however that primum non cicera is always a critical principle. :)

fisher_man89
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Re: Single Most Valuable Thing

Post by fisher_man89 » Sat Mar 24, 2012 3:11 pm

That solid investing theory is not complex or some sort of black magic beyond the grasp of the non-professional.
To invest well is almost mind-numbingly simple, though it is not easy at all to carry out in practice.

Investing seems more like dieting or staying in shape to me than anything else.
In other words, discipline and resolve matter a lot more than intelligence or academic cleverness.

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desertbandit442
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Re: Single Most Valuable Thing

Post by desertbandit442 » Sat Mar 24, 2012 3:12 pm

Once you learn to save :dollar investing is easy :moneybag

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Midpack
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Re: Single Most Valuable Thing

Post by Midpack » Sat Mar 24, 2012 3:16 pm

Less is more...just another way of saying what many posts have already stated.
You only live once...

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tuckeverlasting
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Re: Single Most Valuable Thing

Post by tuckeverlasting » Sat Mar 24, 2012 3:23 pm

That I too can learn the art of investing well enough to Do It Myself; and if I can, almost anyone can.
It's Good To Be A Boglehead

asset_chaos
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Re: Single Most Valuable Thing

Post by asset_chaos » Sat Mar 24, 2012 6:35 pm

I learned it BB (before Bogle), but the single most valuable financial idea I need to transmit to my children is spend less than you earn.

From Bogle (and B'heads) the single most valuable idea is probably the reinforcement that staying the course is the best, if not the only successful, way to proceed.
Regards, | | Guy

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BTDT
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Re: Single Most Valuable Thing

Post by BTDT » Sat Mar 24, 2012 7:46 pm

"Market Timing: Do you seriously think you can predict the future? What else do the voices tell you?" :beer
If past history was all that is needed to play the game of money, the richest people would be librarians.

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norookie
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Re: Single Most Valuable Thing

Post by norookie » Sat Mar 24, 2012 8:05 pm

SheebaElwood wrote:That people really don't know the difference between active management and market timing.
One of them beats the market with less risk. The other tends not to.
But, talking about the difference gets you banned.
Ummm :oops:, I think not. Theres is a sentiment here, most definitely. Say, your % of equites exposure tanks, some advocate rebalancing, others do not. They do it on their BDay, Jan 1st, April 15th, whenever. This is not SEEKING ALPHA, its not loosing any of your money! Be it $1.00, or 1M. :moneybag :mrgreen:
" Wealth usually leads to excess " Cicero 55 b.c

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