Investing Rule#4: Diversify! Diversify! Diversify! (common sense investing)

All videos and book at http://financinglife.org . It's not enough to own stocks of hundreds of companies. Learn about the "magical" benefits of poorly correlated investments. Many call this important concept "asset allocation". This is part of ten short videos series that summarizes the common sense investment advice from John Bogle, which his followers endearingly call the Boglehead Investment Philosophy. It describes the best ways to invest money, and the best place to invest money. You'll learn how to choose mutual funds, why index funds are smart investments, and how to invest in bonds which should be a part of everyone's asset allocation.

Comments

1. Hi Rick, great videos. I have a quick question about asset allocation. My target is 56% U.S. equity, 34% int'l equity and 10% bonds. My "big ticket" item is early retirement (~25-year time horizon). I recently signed up for Personal Capital, and PC recommended that I allocate 10% to Alternatives, which includes gold, silver and real estate. I dislike gold & silver, but I see the potential value of hedging with REITs, etc. What do you see as the appropriate role of alternatives in a portfolio?
2. Hello, i have a question, what is the average COMPOUNDED GAIN you can expect from a stock market over the long term? With this i mean how much money can i get within 50 years for an example if I extract all fees, taxes and inflation, is this 4% 8 %...? Thanks for ur reaction?
3. I didn't know RE's Umbrella Corporation use to sell umbrellas.
4. @luisrock2008 Nope. This isn't rocket science. You'll do just fine using common sense and simple arithmetic.
5. @eriklvandijk A belated thank you for this comment. I had fun making these videos. And you are right, it doesn't have to be complicated if you just do a few things right and avoid the common mistakes. Goodness, those words sound an awful lot like my mentor John C. Bogle. It appears that you are actively educating the public as well. Thank you for that!
6. My compliments. Great way of explaining something difficult in an easy way. As a former scientist turned practitioner (advising pension plans now on their Emerging Markets investments and Asset Allocation) I know that it is not just about rocket science. It is also about communication so as to ensure that people will avoid the biggest mistakes. Correlation, diversification and risk management never got the attention they deserve. Keep up the good work!