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Past Newsletters
Best and Worst Investments January 2015
The Wall Street Journal had an article last week in which they asked a variety of luminaries to share both their best and worst investments. None of the best investments involved speculations on individual stocks, commodities, or complex investment strategies – but several of the worst investments did. The best investments shared common themes of being diversified, staying the course, keeping costs low and other boring advice we give to our clients ad nauseam. Since it is always satisfying to cite widely known and respected people to bolster our own opinions, we thought we would share some of their comments: Burton Malkiel, former Princeton economics professor and author of the investment classic “A Random Walk Down Wall Street” – “The most consistently best investment I have ever made is a total-stockmarket index fund.” William Sharpe, Nobel laureate in economics and former finance professor at Stanford (and local resident) – “When I taught investments at … Stanford, I started the first class by writing a phone number on the board. I then told the students that it was the most valuable information they would get from me. … it was the phone number for Vanguard.” Laurence Siegel, director of the CFA Institute Research Foundation – In 1982, he received a $5,000 insurance settlement check and invested it in the Vanguard 500 index fund. “They’re (now) worth about a hundred grand.” Jim Cramer, host of CNBC’s “Mad Money,” who we like to call “Mad Dog Cramer” due to his exuberant style and generally poor advice, cites an investment in a specific company that was in bankruptcy. He figured he was buying shares at depressed prices, but they went even lower. So he kept buying more and more shares at ever lower prices. Eventually the prices stabilized and then skyrocketed, only to go into bankruptcy again. He recalls asking himself during this period “How much could I lose?” To his credit, he admits the answer was “How about everything.” As an aside, it was interesting to us that the article did not quote Cramer regarding any best investments. At Integris, we like to remind ourselves and our clients that money is not a goal, but rather a resource to accomplish life goals. And the real goals, we have observed, almost never have anything to do with “stuff.” The real goals are almost universally about feeling safe, relationships, and experiences. With that in mind, I’ll share my favorite answer to the article’s question “what was your best investment:” Dana Gioia, former chairman of the National Endowment for the Arts, says his best investment was the
83 cents he paid for two cups of coffee so that he could prolong a conversation with a beautiful woman he had just met, who subsequently became his wife. He goes on to quip that “This investment required substantial additional cash infusions, which have continued to provide a robust return on capital.” written by: Giff Lehman Integris Wealth Management, 456 Washington Street, Monterey, CA 93940 | 831-333-1717 | integriswealth.com Copyright 2008 Integris Wealth Management. All Rights Reserved. Click to Unsubscribe
