White Coat Investor Podcast

WCI #367: The Importance of Asset Allocation

May 16, 2024
Learn about the importance of asset allocation in your investment plan, adjusting it for long vs short term goals. Explore a philosophical discussion on economic growth, handling risk, and the benefits of diversified portfolios. Discover insights on optimizing returns through low-cost investing strategies and the advantages of integrating bonds with stocks for a balanced approach.
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ANECDOTE

Adventurous Escalante River Trip

  • Jim Dahle went on a multi-day float and canyoneering trip on the Escalante River, seeing few people.
  • He enjoyed the remote adventure, appreciating the spectacular scenery and safety in planning.
INSIGHT

Stocks Represent Company Profits

  • Investing in index funds is investing in profitable companies, not just vague economic growth.
  • Long-term growth of economies isn't infinite, but companies owned can still generate profits.
INSIGHT

Economic Growth Underpins Indexing

  • The long-term economic growth premise underlies index fund investment philosophy.
  • Historical evidence shows no infinite economic growth but investing in profitable companies remains valid.
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