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With Investor Phil Town

InvestED: Ep. 252 – New Indicators

“The market always goes up in the long run, but in the long run we’re dead.” – John Maynard Keynes

In this week’s episode of InvestED, Phil and Danielle discuss the ever-changing stock market, the unpredictability that comes with it and the milestone high and lows of the S&P 500 in 2019.

Phil receives a chart from his step-son in business school showing the standard deviation between having 1,000 stocks to 800, 700 and so forth.

Phil notes the standard deviation of returns is almost identical if you have thirty stocks or more than if you have 10 or 20. He emphasizes you don’t get any real benefit in terms of diversifying your portfolio much past 20 stocks.

Later on in the episode, Phil and Danielle revisit their past discussion of Shiller’s PE Ratio. They highlight that as more people put their investable capital in the stock market (approaching 60-70%) the stock market rates of return go down towards zero.

The more people who think that the stock market is a good place to put money, the worse the stock market is going to be.

Finally, they touch on the need for a checklist. Phil teases the topic for next week’s episode, noting that he has an updated checklist that’s different from the checklist mentioned in their book, “Invested”.

Very few people reveal their checklists, so this is information you will not want to miss.

If you want to learn more about the importance of checklists, join us on the podcast today!

 

Show Notes:

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Those reviews help other people find this podcast and Danielle and Phil also love reading them so that we can improve your listening experience. Just click here to review, select “View in iTunes”, then “Ratings and Reviews”, and “Write a Review” and let me know what your favorite part of the podcast is. Now go play!

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On the InvestED podcast, Phil and his daughter Danielle shine a light on the successful investing strategies that gurus like Warren Buffett have used for 80 years. Listen in for a great stock market education on basics, learn how to invest on your own, and follow along with real-time examples and investing tips from week to week.