For some reason this video takes a while to load, so please be patient. Two investment legends, Charles Ellis and Jason Zwieg, discuss the 2008 financial meltdown, and the lessons they learned:
- The unthinkable can and will happen.
- In times of crisis, risk assets like stocks and bonds go down excessively, but don't panic, they also recover excessively.
- A constant cushion of cash is a must for every portfolio.
- Every portfolio needs a core of protection, assets that are negatively correlated to the stock market, that will zig with other things zag, such as cash, gold, and U.S. Treasury Securities.
Really interesting. Charley Ellis gives an exellent "elevator speech" on why individuals should be indexing. He is a little naive at one point when he says that investors who cannot stand the volatility should stay out of the market. The fact is that we have been forced to the point where, whether we like it or not, we have to take risk. If we don't we will have a very difficult retirement. Jason of course is brilliant and I liked the part where he said many people learned that they have a high risk tolerance in 2008. It is valuable info.
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