The title of this post is my basic philosophy when it comes to investing. It has served me well and think that it is good advice for others.
The first part which is to start early is a universal sentiment and not controversial. There is no one out there recommending to not invest or saying to wait until retirement to start investing. So, that is easy to follow.
The next part, buy stocks, flows from the first. Over the long-term stocks are the best investment there is for the retail investor. They have the best returns over time and are the place to be early with your investment funds. As time goes on and your portfolio grows it also recovers fast after a down market. Finally, when it has grown large, down markets don’t really have the same impact on your portfolio so it is better to stay in stocks to take advantage of the recovery.
The final point is the possible controversial one. I have added a certain percentage of bonds via bond funds to my portfolio over time (less than 10% at the max) and it hasn’t been a benefit. I agree that it will keep you from significant losses but it won’t protect you completely. It still goes down during down markets and is slow to recover. You also lose the benefit of significant upside when there is a big rise in the market. I just don’t see the point of having them in a portfolio unless you might truly need the money in 3 years or less. If you disagree, please let me know in the comments. I’d love other thoughts on the subject.
On another note, if you are looking for a gift for the young reader in your life, you can find some great children’s books on Amazon. Just go to these links The Desert Fairies of Oylara, The Rainforest Fairies of Oylara, and The Artic Fairies of Oylara and order them.
Finally, check out some pretty cool music on YouTube if you have a few minutes: Introduction , Mosh, Smoke, and Watch Out . Enjoy!
Patient and Disciplined Saving 