03-24-2004, 7:56 PM | Post #108055 |
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Author, Moshe Milevsky, Ph.D., is a professor of Finance at York University in Toronto. and publisher of over 25 research articles. Here are excerpts from his book, "The Probability of Fortune: Financial Strategies with the Best Odds.":
"The more you know, the better the odds that you won't experience financial loss and regret down the road."
"Low fund expense ratios are crucial."
"Given the enormous competition that exists in the marketplace, and given the sheer number of individual analysts and institutions that are searching for undervalued stocks, I am somewhat skeptical about anyone's ability to consistently beat the market."
"Although it may be somewhat harsh to compare mutual fund managers to coin tossers, the methodology for determining skill is essentially the same."
"It makes no sense to blindly recommend a specific financial strategy without looking at appropriate alternatives."
"Despite the additional benefits of variable annuities, I would recommend that you invest instead in no-load, low-expense mutual funds."
"If you are in a very low tax bracket, tax-free municipal bonds make little sense."
"If you do want to buy a variable annuity, don't put it in a qualified (tax-deferred) retirement plan."
"Correlation is the key and secret to diversification's success."
"Buying 10 stocks or 10 mutual funds can be just as risky as buying one stock or one fund, if they are all in the same general economic and financial sector."
"I am very much averse to computer programs that offer black-box solutions to your investment needs."
"The general consensus among researchers is that an appropriately diversified portfolio should have between 25 and 40 stocks, so even a single mutual fund should be sufficient for diversification purposes."
"If you examine the real return from treasury bills over the last 50 years, the number is exactly 1.3%."
"It is very important to have some exposure to equity-based investments, even during your retirment years."
"One way or another, you must turn your investment into a personal retirement pension."
When you get financial retirement advice, always be prepared to ask: 'What are the odds that I will outlive my money if I follow your suggestions?"
"Life annuities are among the most misunderstood and under-appreciated financial products available in today's marketplace."
"It is extremely important that you not annuitize too early in your retirement years."
"One of the main themes in this book is that your financial future is random, uncertain, and unpredictable."
"It all comes down to risk and reward."
"If you can't handle the short term, if the uncertainty is stressful and the headlines are unbearable, then the markets are too hot for you: get out of the kitchen."
"Volatility will be no further reduced by dollar-cost averaging than it would be by a simple asset allocation mix between equity and fixed-income securities."
"Any action that you cannot reverse, such as reconverting your pension annuity to a lump sum, should be delayed as long as possible."
"Remember, calculate the odds. And then put them to work."
Professor Milevsky has a website at: www.milevsky.com.
Originally posted in thread: 33993