Ever since I learnt about the 4 major economic cycles from the book “The Permanent Portfolio”, I seemed to have not gotten enough of it.
As you already know, the permanent portfolio requires a quarter of your investment in gold. There are those who swear by it, and then there are those who are highly against it… like Warren Buffet.
Whether I was having second thoughts about buying metal coins that yielded no dividends, or interested in finding out more about this asset class, I ended up doing lots of research on the topic of diversification.
Mr Dalio is a billionaire philanthropist who has reached a point in his life where he wants to share his knowledge and experience to help others. Ray attempts to shed some light on how the economy works based on what he has learnt throughout his career.
It was exactly the video I was looking for.
Check it out. Possibly, the best 30-minute investment of your time.
Whenever I read something in the news about the current state of our economy, I would go back to this video and try to find its reference. I also go to it whenever I need to remind myself of the reason and importance of diversification.
After watching this countless number of times, I came to this conclusion.
There’s so much more to the economic machine than just cash and credit. There’s the human condition — greed, laziness, jealousy, ambition, diligence, enterprise, needs and wants — and the resulting necessity to bind all these together into one coherent and functional system. How can any one person correctly predict what will happen to the future of the markets with so much going on? I don’t think anyone can.
The human condition for the vast majority is unstable and unpredictable, and the case is true even for some of the most influential people today (think Trump). In order to invest with confidence, the best that one can do, is to understand the risks and to manage it — through diversification in various asset classes.
Well, good thing that Mr Dalio made this video available in multiple languages1French, Italian, Spanish, German, Japanese, Russian, even in mandarin, so I could share it with my extended family and friends in Taiwan.
I hope you’ve learnt as much from it as I did!
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