I was recently asked about my ‘Philosophy of Life.’ Honestly, I had to think about this one. But for me, at this stage in my life, it comes down to this:
Invest in people, not things.
Of course, there will be those who ask about my investment strategy and a few of the reasons behind it, so here goes:
- The true value in this type of portfolio reveals itself fairly quickly (CMV has no bearing)
- Risk is typically minimal
- Offers a Lifetime ROI
- Unrealized gains are huge, and tax free
Tips for an excellent ROI:
- Capital invested at incremental minimums offers the greatest net growth over time
- Insider selling always fails and is too often led by inappropriate speculation
- As you get older, buybacks are necessary
- Smaller caps lead to better returns
- Diversification is necessary
- Don’t rush into emerging markets
- Don’t always believe it when they talk about ‘junk bonds,’ make your own assessment
- Index funds are a guaranteed fail
This portfolio may not be for you if:
- You’re looking for short term returns
- You’re worried about consistent debt/equity ratios (never happens)
- You think your own capital shouldn’t be at risk