During the course of a year, I read a lot on the topic of investing and personal finance. Articles, blogs, books, tweets, white papers, journal pieces, etc.
I read some good stuff (and I read, unfortunately, too much bad stuff). Below, I highlight four of the best investing tidbits that I came across in 2014.
One of the best pieces of advice I read—and you may have read it or read about it too, as it was well publicized—was Warren Buffett’s annual letter to Berkshire Hathaway shareholders. In the letter, Mr. Buffett, considered by many to be the world’s best investor, gave the world a peek into his will and, specifically, the investment instructions to a trustee for his wife’s benefit. In short, he suggests a 10% holding in short-term government bonds and 90% in a very low-cost, broad-based U.S. stock index fund. Mr. Buffett wrote: “I believe the trust’s long-term results from this policy will be superior to those attained by most investors—whether pension funds, institutions, or individuals—who employ high-fee managers.”
I am certainly not endorsing any specific asset allocation here, but takeaways. First, have an estate plan, which may sound like a planning tool for the wealthy, but I can assure you it is not. I’m smart enough to know you need an estate plan, but not smart enough to give you additional guidance. I will defer to our resident estate planning expert, Alisa Shin.
Second, base your investment plan on low-cost vehicles. Cost is a factor you can control. The less you pay to invest, the more you keep.
