A Dying Banker’s Last Instructions

http://www.nytimes.com/2010/11/27/your-money/27money.html

by dgudkov • 16 years ago

58 15 16 years ago

nytimes.com

RiderOfGiraffes• 16 years ago

Single page:

http://www.nytimes.com/2010/11/27/your-money/27money.html?pa...

ljordan• 16 years ago

Why yes, I work on Wall Street and the man's got a point. In fact, the situation he describes is part of what inspired me to change careers.

light3• 16 years ago

That's an awfully long article to say his dying and written a book on his 'new found' way of investing.

hugh3• 16 years ago

And to save everyone the trouble, his "new found" way of investing is:

The book asks readers to make just five decisions.

First, will you go it alone? The two authors suggest hiring an adviser who earns fees only from you and not from mutual funds or insurance companies, which is how Mr. Goldie now runs his business.

Second, divide your money among stocks and bonds, big and small, and value and growth. The pair notes that a less volatile portfolio may earn more over time than one with higher volatility and identical average returns. “If you don’t have big drops, the portfolio can compound at a greater rate,” Mr. Goldie said.

Then, further subdivide between foreign and domestic. Keep in mind that putting anything less than about half of your stock money in foreign securities is a bet in and of itself, given that American stocks’ share of the overall global equities market keeps falling.

Fourth, decide whether you will be investing in active or passively managed mutual funds. No one can predict the future with any regularity, the pair note, so why would you think that active managers can beat their respective indexes over time?

Finally, rebalance, by selling your winners and buying more of the losers. Most people can’t bring themselves to do this, even though it improves returns over the long run.

If you think the article is full of filler, wait 'til you see how filler-chocked the book is!

pavel_lishin• 16 years ago

Aren't 2 and 3 fairly basic and obvious?

minsight• 16 years ago

If I had brain cancer and had a book to write, I would almost certainly err on the side of brevity.

sudont• 16 years ago

He even said “Everyone wants to hear what you have to say…” when you have a brain tumor.

Apparently NYTimes still has the romantic notion of banker noblesse oblige.

nerfhammer• 16 years ago

It actually appears to be a PR piece for Dimensional Fund Advisors.

mbesto• 16 years ago

While it is disheartening to hear about someone battling cancer, why is this on the front page of HN?

brown9-2• 16 years ago

Because its about the futility of conventional investment wisdom.

mbyrne• 16 years ago

This guy was a bond salesman, not an investor, it is no wonder why he didn't even understand the basics. It didn't matter. His job was to convince people to buy what his company was selling and to generate commissions.

a5seo• 16 years ago

There's an interesting story about how Google invited a bunch of brokers and wealth managers to present to their employees, along WITH Nobel laureate Bill Sharpe (and others) who basically torpedoed the active wealth manangers' hopes of scoring clients.

Posted here: http://news.ycombinator.com/item?id=1949158

I like the idea of having evidence that i couldn't be doing better by trying harder. I prefer to focus my energy on building value thanks very much.

jaysonelliot• 16 years ago

I started that article feeling very cynical. "He's dying of cancer, and his last work is to write an investment book?"

Then I read the whole story. He's trying to leave something behind that will improve people's lives by giving them more control over one of the most important things in their lives - their finances.

I was genuinely moved.

Jabbles• 16 years ago

Keep in mind that putting anything less than about half of your stock money in foreign securities is a bet in and of itself, given that American stocks’ share of the overall global equities market keeps falling.

Could someone explain this sentence please? What does he mean by "a bet", and why is the fraction of global shares that are American important?

A Dying Banker’s Last Instructions

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