Navigating Risk in Stocks and Bonds

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Episode 3019:

JL Collins emphasizes the power of simplicity in investing, advocating for a two-fund strategy using VTSAX (stocks) and VBTLX (bonds) to navigate the wealth acquisition and preservation stages. He explains that while 100% stocks often yield the best returns, adding a small percentage of bonds can smooth volatility. The key to success isn’t complexity but discipline staying the course through market ups and downs while keeping costs low.

Read along with the original article(s) here: https://jlcollinsnh.com/2014/06/10/stocks-part-xxiii-selecting-your-asset-allocation/

Quotes to ponder:

“There is a major crash coming and you’ve got to toughen up, cupcake, because nobody can predict when, despite all those claiming they can.”

“The more you hold in stocks the better your results and the more gut wrenching the volatility you’ll be required to endure.”

“Making a few sound choices and letting them run is the essence of success, and the soul of the simple path to wealth.”

Episode references:

Vanguard Retirement Nest Egg Calculator: https://retirementplans.vanguard.com/VGApp/pe/pubeducation/calculators/RetirementNestEggCalc.jsf

Betterment: https://www.betterment.com

The Simple Path to Wealth: https://www.amazon.com/Simple-Path-Wealth-Financial-Independence/dp/1533667926

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