Sunday, January 26, 2020

The Little Book of Safe Money: How to Conquer Killer Markets, Con Artists, and Yourself

The Little Book of Safe Money emphasizes the safe. Inflation Protected Securities are the gold standard. They are guaranteed to beat inflation. Further investments should be a mix of stocks and bonds. The best are low cost index funds. Any investment with fees or yields that are higher than others is by necessity introducing too much risk. People should understand the market is filled with people. There is a seller for each purchase. Why do you think you are smarter than the person at the other end of a transaction? It is also important to focus on liquidity. If you don't have enough liquid assets you may need sell other investments at times with the market fails. It is also important to manage your "human capital". It is perhaps the greatest returning investment. However, you should also keep in mind that your human capital is invested in your company and industry. If your investments are in the same area, you may be too concentrated in a single area.
It is important to not take more risk than you need to. It is also good to understand psychology weaknesses, especially among men. The emphasis on the book is safety. Following the content will keep you with investments that lose minimal value in a down market, yet do not gain very much in a bull market. The principles do not exclude high risk investments. However, these are treated as "gambles" that can only be taken on with money that can be afforded to be lost.

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