Rick Ferri Quotes

“Let’s face it: Most investment companies are in business to make money from you, not for you. Every dollar you save in commissions and fee expenses goes right to your bottom line.”

“Asset allocation eliminates the need to predict the near-term future direction of the financial markets and eliminates the risk of being in the wrong market at the wrong time.”

“Investors who followed a broadly diversified asset allocation that included a total market fund and a small value index fund would have faired very well during the past decade.”

“Nothing destroys a good long-term plan like extreme short-term volatility. That throws people off track, and they often do things that are emotional rather than rational.”

“Overconfident investors generally believe that they have more knowledge and information than they actually have. As a result, they tend to trade too much and underperform the market.”

“The enemy of a good asset allocation is the quest for a perfect one. Fight the urge to be perfect.”

“The problem with long-term investing is the short term.”

“Volatility creates lower returns and thus is itself a risk. If you can reduce the volatility in a portfolio, then the compounded return moves higher, closer to the simple average return of the weighted investments in the portfolio. This is how lower portfolio price volatility increases portfolio return over time.”

“A portfolio is like a birthday cake:

1/4 Your allocation to stocks, bonds, and cash are the layers of the cake;

2/4 Your allocation to International stocks vs. US stocks, and corporate bond vs governments is the icing on the cake;

3/4 Small-value and other factor tilts are decorations on top of the icing;

4/4 Commodities, bit-coin, and other alternatives are the bright glowing candles – soon to be blown out and forgotten.”