A lot of exciting product announcements this week, and we take a look at possibly the most bulletproof passive investment strategy. As always, anything we talk about is focused on giving you ideas to make better long-term decisions about health, finances, business and more.
Flood survival tips from the Weather Channel, in Mixed Reality. Delight & dread to watch at the same time.
Two years ago many people in the UK lost 10% of their money.
The pound dipped following the Brexit vote and has not yet recovered.
A good reminder that even cash is not safe. But what is?
The principle most relevant here is 15 uncorrelated bets. This is a good lower bound for the number of different asset types you should hold. Portfolios with 15 uncorrelated investments have significantly better risk-adjusted returns (provided the assets are not chosen by compromising returns).
This is very valuable because most individuals (including myself) are not following this principle. Common examples of "close but not quite":
- I've got only 5 asset types, but these are mainly bonds, cash, real estate so there is less risk involved - this is wrong on a risk-adjusted-return basis, you could achieve better returns by moving to a larger number of riskier assets,
- My asset manager invests in over 50 different stocks - this is wrong, because stocks are highly correlated to the appropriate market index (you can replace stocks with crypto, bonds, etc. and this is still true),
- 10% of my assets are invested in 15+ different asset types and I have a massive mortgage - nothing wrong with owning property, but this portfolio is over-exposed to the real estate market. The proportions of assets do matter (see Risk Parity).
One area that exemplifies this is venture portfolios, which hold many companies to increase the probability of a single company driving the overall return of the fund.
Many successful individuals are over-exposed in some of their assets. They may not be pursuing the best wealth-management strategy, instead being mission-led. Compare Elon Musk and Peter Thiel. There is nothing wrong with that if the mission is more fulfilling than the money.
I've recently purchased a massage ball for pain relief and recovery during marathon training. This picture shows the Nike recovery ball (which is beautiful), but I use the cheaper Aptonia 500 from Decathlon (GBP 2.99). It's been so great, it's already travelled with me.
I'm extremely obsessed with "minimal purchases" finding low-weight, low-volume things that add significant value. I even own a MUJI Hand-held shredder (wonderful at disposing mail).
This week, I've finally received my genetic report from 23andMe. Forming a baseline view of risk based on family history and genetic information is a good starting step for a preventative health care program. I came across this website to point to useful other reports you can generate with your 23andMe raw data. It's worth taking data security extremely seriously when sending your genetic data to any provider.
There is a new e-mail client called Superhuman on the rise with rave reviews. For $29/mo, they claim to radically speed up and alter your inbox experience. You can get on the waiting list or scan twitter for a free referral.