Interested in Owen’s timeless investing lessons?
In this episode, Chief Investment Officer Owen Rask updates listeners on the economy, inflation, interest rates, big news headlines and shares his timeless money & investing lessons.
- Capitalism works. If companies and entrepreneurs create value for society by solving problems via their companies, shareholders supporting them must also be rewarded.
- The stock market is a vehicle for transferring wealth from the impatient to the patient (see Buffett annual letters)
- Wealth creation can be summed up in two words: accumulate assets.
- Fewer investment decisions often result in better decisions. High conviction and concentration is the best approach when you know what you are doing.
- Diversification is very important for everyone — including the tens of millions of Aussies & Kiwis who have better things to do than manage an investment portfolio. This is why we build your portfolio mostly with ETFs.
- The benefits of extra diversification will rapidly diminish after 10 uncorrelated positions (see Evans & Archer), however, the ‘risk side’ of diversification is only one part of the equation. You can use your Satellite to learn, grow and concentrate.
- Less than 5% of companies on the stock market are responsible for all of the stock market’s wealth creation over bonds (see Professor Bessembinder). Again, carefully concentrate – or diversify broadly – this is the ‘other’ side of diversification.
- There are three commonly accepted investing ‘edges’: behaviour, analytical ability and information. Investors would be wise to focus first and foremost on their behaviour. It’s the easiest way to get better outcomes. It’ll make you a better human being.
- Most people shouldn’t invest in individual shares because they lack the time, inclination and/or curiosity. Each of these is required to invest well over time.
- Investors do not need to choose between ‘active’ or ‘passive’ — everyone should use both in a Core & Satellite portfolio.
