J. David Stein used to manage billions of dollars.
As the Chief Investment Strategist at Fund Evaluation Group, LLC, a $33 billon investment advisory firm, Stein developed the group’s investment philosophy and process.
He guided investments for major universities and nonprofits, including the Texas A&M University System and the Sierra Club.
He retired at age 46.
Now that he’s retired, he faces a different challenge: How should he invest his own money?
What investing philosophy should he follow in his own life?
And what can we learn from that?
Stein, who now hosts a podcast called Money for the Rest of Us, joins me on today’s show to talk about his big-picture investing ideas.
Here are a few takeaways:
- Do not trade, because you do not have an informational edge. Instead, focus on long-term investing.
- Create uncomplicated portfolios with the fewest number of holdings. This reduces decision fatigue & fights the paradox of choice.
- Focus on asset classes rather than individual stocks.
- We feel lost when we have too many choices because we want to optimize. Don’t optimize; satisfy.
- Embrace uncertainty. “If you never miss a plane, you’re spending too much time at the airport.” — Metaphor: if you never take a loss, you’re probably playing it too safe.
- Save more and spend less
- Diversify, but not too much
- Keep a margin of safety (emergency savings)
- Hold ‘pockets of independence’ from the market by investing in your own career, real estate, or other non-market assets.
- Book – Smarter, Faster, Better by Charles Duhigg
- Money for the Rest of Us Podcast
- Money for the Rest of Us YouTube Channel
- How to Start a Blog in 5 Minutes
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