STREET DOGS: Advice
Don’t do dumb things, diversify, avoid the biggest and minimise costs
Investment advice from Meb Faber at Cambria Investment Management. Don’t do dumb things: success is simply avoiding a self-inflicted explosion. Left to ourselves, we’ll often find a way to underperform. Unfortunately, many of us can’t seem to get out of our own way. Whether it’s chasing the latest hot stock, doubling down on a train wreck investment because "it just has to bounce back" or getting swept up in a herd mentality buying frenzy when fundamentals are screaming the opposite, we find ways to hurt ourselves. You begin to avoid these outcomes with the help of two things: awareness and humility; the awareness that you’re inclined to hurt your portfolio and humility to accept that reality. Diversify globally across stocks, bonds and real assets: portfolios of most investors manifest an abundance of home country bias. The problem is home country bias isn’t patriotic, it’s dangerous and exposes you to unnecessary risks. Of course, diversifying by geography isn’t the only challenge...
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