If you have the desire for it, you can consider putting a small fraction of your net worth in speculative assets, like single stocks or cryptos. We suggest keeping this portion to no more than 5% of your investable net worth.
"Index funds consistently outperform actively managed funds, by 90% or more over longer periods of time."
This statement makes it sound like the return of index funds is 90% greater than that of actively managed funds (e.g., if the CAGR of the average actively managed fund is 10%, then the CAGR of the average index fund is 19%). It should be re-written to something like the following.
"Over 15-year time periods, only about 10% of actively managed funds beat their passively managed index fund benchmarks."
Good stuff as always, Daniel. I bought the Know Your Number course. Excited for it to launch. Thanks for the code!
Absolutely loving your content Daniel, would you be open to allowing us to share it with our 60k+ audience as well?
What about investing a small fraction of your net worth in high-risk / high-return assets with a 10+ year horizon (such as Cryptos)?
If you have the desire for it, you can consider putting a small fraction of your net worth in speculative assets, like single stocks or cryptos. We suggest keeping this portion to no more than 5% of your investable net worth.
Intereting that you mention 5%.
That’s exactly what I do. I even wrote a post about precisely this approach:
https://open.substack.com/pub/danielschmitter/p/002-invest-like-venture-capitalists?r=1imcsd&utm_medium=ios&utm_campaign=post
"Index funds consistently outperform actively managed funds, by 90% or more over longer periods of time."
This statement makes it sound like the return of index funds is 90% greater than that of actively managed funds (e.g., if the CAGR of the average actively managed fund is 10%, then the CAGR of the average index fund is 19%). It should be re-written to something like the following.
"Over 15-year time periods, only about 10% of actively managed funds beat their passively managed index fund benchmarks."
Updated, thanks for pointing that out!
Great article!! But i'll admit... i believe we were promised a funny screenshot from tuesdays preshow!
How could I forget!? I believe this link should work: https://imgur.com/a/gHxYtL7