← Money Rehab with Nicole Lapin
Money Rehab with Nicole Lapin
Invest Like the Best: Three Pro Tips from Famed Investors Ray Dalio, Warren Buffett, and Michael Burry
00:07:56
Loading summary
Transcript1 lines
- [00:00]
A
If you take only one thing away from today's episode, Money Rehabbers, let it be this. In my not so humble opinion, Public is the best brokerage for investing in bonds, stocks, ETFs, options and even crypto. You can try it out for yourself and see why I love it so much. @Public.com MoneyRehab Public is legit, the only platform I use to buy bonds. Before public, I used to buy government bonds the hard way. Slow websites, confusing interfaces, website designs straight out of the early 2000s. Just picture where fun goes to die. That was it. And then I found Public about five years ago and I have not looked back. I can now finally buy bonds without wanting to rip my hair out. Public makes it so easy to buy bonds. Whether you're into Treasuries or corporate bonds, you can browse thousands of options right from your phone. But like I said, Public isn't just all about bonds. You can also find stocks and ETFs and they offer a high yield cash account with a 4.1% APY, which is higher than the national average. They even have retirement accounts. You can now open a traditional or Roth IRA or both right on public so your future self covered. And for a limited time you can earn a 1% match on all your IRA deposits, IRA transfers and 401k rollovers. If you want an investing experience that's both smart and simple, head to public.com money rehab one more time. Public.com money rehab this is a paid endorsement for Public Investing. Full disclosures and conditions can be found in the podcast. Description Support for today's episode comes from Square the easy way for business owners to take payments, book appointments, manage staff, and keep everything running in one place. On this show and in my books, I always talk about how important it is to have multiple streams of income. But how do you actually go from hobby to hustle? The answer? Square. I have seen it so many times in real life. Just this weekend at the Farmer's market there was a mom selling banana bread. We love banana bread and I could not resist. In the past I might have missed out because I never carry cash. But with Square, she was able to take my card. In seconds I got my delicious treat, she got paid and neither of us had to stress, with Square you can get all the tools to run your business with none of the contracts or complexity. And why wait? Right now you get up to $200 off square hardware at square.com go mnn that's square.com G O M N N as in Money News network Run your business smarter with Square get started today. I'm Nicole Lapin, the only financial expert you don't need a dictionary to understand it's time for some money rehab. Are you sick of hearing my voice yet? Never. Right. Well, I thought just in case, I'd switch it up a little and instead of hearing my favorite financial tips and tricks, I'd bring you some faves from three of the greatest investors of our time. Ray Dalio, Warren Buffett, and Michael Burry. For each of these MVPs, I'm going to share one of their famous pieces of financial advice that has stood the test of time. Number one, the All Weather Portfolio By Ray Dalio Ray Dalio is the founder of Bridgewater Associates, one of the largest and most successful hedge funds in the world. He's a highly influential figure in finance, but his thing is a talent for analyzing economic cycles and creating investment strategies around that analysis. One of his most famous strategies is called the All Weather Portfolio. Think of this as a recipe for an investing portfolio. Dalio has analyzed historic stock market data so that he could put together the most promising ingredients in a recipe at the ratios that make the most sense. But instead of flour and sugar, Dalio's recipe calls for 40% long term U.S. bonds. So those are bonds that mature in 20 plus years. 15 15% intermediate term U.S bonds. So those are bonds with the maturity of 7 to 10 years, 30% in stocks, 7.5% in gold and 7.5% in commodities. He calls it the All Weather Portfolio because it's designed to perform relatively well under all economic conditions, including recessions. So when listeners ask me about diversification, especially if they have some 2008 financial crisis trauma and they're skittish around financial markets, I tell them about this portfolio. Number two, invest like Warren Buffett and pick low cost S&P 500 index funds. Warren Buffett is the CEO of Berkshire Hathaway and one of the most successful investors of our time. He's nicknamed the Oracle of Omaha, which is a hilarious visual and kind of a weird flex. But he is renowned for his value investing strategy, which focuses on buying undervalued companies with strong fundamentals and holding them for a long time. His disciplined approach and impressive track record have made him a revered figure in the investing world, with many looking to him for wisdom and guidance. One of Buffett's most famous pieces of advice for individual investors is to invest in low cost S&P 500 index funds. If you've been on your money rehab game for a While now you know that this is my investing jam too. In case you need a little refresher though, an index fund is a type of mutual fund or exchange traded fund designed to replicate the performance of a specific index. The S&P 500 is an index that aims to mirror the movements of the market as a whole. By investing in an index fund, you're essentially buying a little piece of everyone of those companies in that index. This diversifies your investment across many companies and sectors, reducing your risk. Buffett's endorsement of index funds is rooted in the idea that most investors, even the pros, struggle to consistently outperform the market. Index funds offer broad market exposure, low operating expenses and low portfolio turnover, which translates into lower costs for you. Over time, these funds can provide solid returns with less effort and lower risk compared to trying to pick individual winners. Buffett himself has instructed the trustee of his estate to invest 90% of his wife's inheritance in low cost S&P 500 index funds. So if that isn't a ringing endorsement, I'm not sure what is. Number three look for the Bigger Upside Like Michael Burry with this one, we're diving into the mind of one of the most intriguing and sometimes controversial figures in the financial world, Michael Burry. If you haven't heard of him, I got you. If you have, you'll know why we're paying attention to his advice. Michael Burry is the investor who famously predicted the 2008 housing market crash and was portrayed by Christian Bale in the Big Short. He is known for his deep analysis and often contrarian views. So when Burry speaks, it is wise to listen. Michael Burry has a knack for spotting asymmetrical risk reward scenarios, situations where the potential upside far outweighs the downside. In finance speak, this means finding investments where the potential gains are significantly higher than the potential losses. Burry's famous bet against the housing market was precisely this. He realized that the downside was limited while the upside was massive if the housing bubble burst. To apply this advice, look for investments where the risk is minimized but the reward potential is high. For example, undervalued stocks can offer big returns if you've done your homework and understand why they're mispriced. The key is thorough research and a clear understanding of the risk involved. This approach isn't about playing it safe. It's about making calculated strategic moves where the odds are in your favor. For today's tip, you can take straight to the bank Dalio, Buffett and Burry. All right with some frequency about their takes on the stock market. These are some of the brightest minds in investing right now, so when they talk, we should definitely listen. I subscribe to updates from all of their websites so I can incorporate their latest thinking into my investing moves and advice for this show. If you're looking for some reading, I honestly can't call it light reading, but it is reading. Check out their writing or set a Google alert for their names. A Google alert won't turn up every new piece of writing Buffett does, but it will tell you when cnbc, let's say, picks up one of his investing hot takes in an article. And if that's more your jam, that's valuable too. Money Rehab is a production of Money News Network. I'm your host, Nicole Lapin. Money Rehab's Executive producer is Morgan Lavoy. Our researcher is Emily Holmes. Do you need some Money Rehab? And let's be honest, we all do. So email us your money questions moneyrehaboneynewsnetwork.com to potentially have your questions answered on the show or even have a one on one intervention with me. And follow us on Instagram, MoneyNews and TikTokoneyNewsNetwork for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.