The moderator for this year's Q&A with the experts panel is my good friend and Bogoheads conference team member Mel Turner. Many of you know him as Tom, which stands for the other Mel because the two of us is very confusing. Mel is a retired airline pilot. He's a fellow Marine who flew A-4 Skyhawks over South Vietnam and Laos.

He has flown all over the world and his last assignment was flying Boeing 757 and 767s out of Philadelphia to Europe. While his employment was as a professional pilot, his avocation was the world of finance. He bought the first mutual funds in 1978 and made his first investment in Vanguard in 1978.

Jack Bogo continues to be his financial hero. He's read hundreds of books on the subject and was thrilled when he ran across the San Diego chapter of the Bogoheads. At age 68, he decided to jump into the certified financial planning program at UCLA where he finished 78 classes while maintaining an A average.

He sees his mission now as returning his good fortunes in good Bogoheads fashion by helping others with their finances. When not traveling, he resides in San Diego with his wife, Kathy, and spends about four months a year in Maui. Please welcome my good friend, Mel Turner. Well welcome to all the first timers.

Welcome here for all the other people that have been here before. Welcome back. We hope you enjoy the conference that's here. So I asked for questions to everybody. I got 22 pages, single space questions, hundreds and hundreds of questions. And I went through them. I apologize that all of the questions aren't going to be available.

I tried to get one's all levels of expertise from beginners to advanced, from people just starting out to people that are in retirement. So I hope it covers the spectrum. I had to overlook some of them. Peggy, I've given your question to Mike Piper for Social Security so you can see him if you can work your way through the crowd that surrounds him wherever he travels in the place.

I'm not going to be able to answer the questions about how to finance your remodeling project or how to invest if there's a nuclear holocaust. That's a true question that I received. So although I'll ask a question, I ask all the panelists to go ahead and respond and interact with each other.

This year it was different. Last year it was like technical questions, like how does an IRA operate and the rest of that. This year there was more behavioral and discipline and emotional kind of things. It was interesting in the questions. So the panel, we're very fortunate to have them.

We're all here to honor Jack, of course, and we're here to learn something. But as you learn something, hopefully you'll take it out and help other people. One more note, everybody here pays the same. The panelists paid 275. I pay 275 as Mel pays 275. There's only one person that doesn't pay.

Guess who that is? So our first panelist is a cofounder of Efficient Frontier Advisors and author of several successful titles on finance and economic history. My favorite is the Pillars of Investing. Please welcome the real Boglehead favorite, Dr. Bill Bernstein. Our next panelist is a Morningstar director of personal finance and a senior columnist at Morningstar, one of the better financial interviewers that I've ever seen.

Please welcome Christine Benz. Next on the panel is Jonathan Clements. Our next panelist is the first Boglehead conference, but hopefully it won't be his last. He's an author at the Wall Street Journal, former author at the Wall Street Journal and a Boglehead favorite. And just on a personal note, I have to say that Jonathan inspired me.

He inspired me so much that I have a four-inch binder of stuff that he used to do in the Wall Street Journal from 1997. I've saved it. And I thought I was the crazy one and somebody walked up and said, "You know, I have a binder of his stuff too." So please welcome Jonathan Clements.

Our next panelist is a CFA and professor of retirement income, a Ph.D. program for financial and retirement planning at the American College of Bryn Mawr. Please welcome Dr. Wade Fowle. Next panelist is a Missouri CPA and the author of several books, 11 books, a blog, Oblivious Investor, award-winning blog.

He also does digital books. My favorite is Social Security Made Easy, but please welcome Mike Piper. Our next panelist, I ran across a quote, he says, "My professional goal is to never be confused with Jim Cramer." Our next panelist is a founder of WealthLogic. He's an author and contributed to AARP Financial Planning Magazine, the Wall Street Journal.

Please welcome Alan Roth. So the first question is in honor of Taylor Laramore. He sent me an email and requested that I submit this question, so this question is for him. You know how we always bump into somebody that's 20 to 25 years old and we've got like 15 or 20 seconds to be able to influence them?

His question is for the whole panel, what is the single most important financial advice you would give to a new investor? I can put this in Twitter form. Minimize expenses and emotions, maximize diversification and discipline. People aren't as smart as they think they are, and using a very simple portfolio instead of trying something fancy is perfectly fine.

And I think I'm just going to reiterate what two other panelists said. If somebody asks me for financial advice, go and buy a talk-of-date retirement fund with expenses below 20 basis points, contribute to it regularly and hang onto it for the rest of your life and you'll be very happy.

Well, a follow-up with that, would you recommend a talk-of-date retirement fund or a life strategy fund or build a three-portfolio fund? If somebody's starting out, a talk-of-date retirement fund where you don't have to actually worry about three different parts of the portfolio seems like a very good idea. That way you're not going to get unnerved because U.S.

stocks have a bad year and foreign stocks have a good year and you think about swapping around. If you buy that talk-of-date fund, all you have is a single share price to look at each day, and that's going to hide a lot of the mess that's going on underneath the hood.

Plus, you know, a talk-of-date retirement fund is going to rebalance for you every year. You don't have to worry about that part of it either, which you would have to with a three-fund portfolio. Just to accentuate Jonathan's point on that, we have this investor return data, which is dollar-weighted return data that looks at the timing of investors' cash flows, and the goal is to capture investors' actual return experience.

What we see when we look at the target date universe is a really beautiful thing in terms of investors buying these funds and staying the course and really capturing the returns that they earn. We've been puzzling over why that is. It might just be something to do with the 401(k) setting where a lot of target date buyers are 401(k) buyers, and so they have their investments on autopilot.

But whatever it is that's working for target date funds, it appears to be really good from a behavioral standpoint, so I would underscore the virtue of that one-stop vehicle, certainly for accumulators. And the only thing that I would add to that is, if at all possible, don't ever look at your account balance.

Someone else should to make sure that no one's committing fraud on it, but you shouldn't know what it is. One - I mean, this is a minor point - but one thing I like about the life strategy funds relative to the target retirement funds is that they force you to think about your personal risk tolerance a little bit.

You have to actively choose whether you want a more aggressive allocation or a more conservative one. That said, I have no qualms whatsoever about recommending a target date fund to somebody if it's low cost. I'm sure that Alan is going to compete vigorously for being the most controversial person on this panel, but I'd like to at least get an early head start.

I think that when you look at services like Betterment and Wealthfront, where they're charging you 25 basis points or more in order to get a portfolio index fund, and all they're offering you over and above a target date retirement fund is tax loss harvesting, why would you pay that 25 basis points?

A lot of people who are enrolling in Betterment and Wealthfront are people in low tax brackets anyway. Often they're buying within retirement accounts. It seems to me like anybody who's drawn to Betterment and Wealthfront would be a lot better off buying a target date retirement fund that begins with the letter V.

I hate to agree with Jonathan after what he just said about that, but even at 25 bps, they have to add some complexities to them. Now they're getting into factor based smart beta types of things, which is not a free lunch. Guess what? Large cap growth has been the strongest performing part of the market, not the smart beta hasn't been so smart lately.

The next question was asked by four different people, so I'll just combine them into the same. There's a little fear out there. Stock markets are hitting record high interest rates or record lows. This is from Trey Parrish and Steve Bruns. He says, "The million dollar question for every retail investor who is asking, with the stock market all times higher, interest rates all time low, cash returning 1%, endless market optimism, no fear, where should an investor put capital?

It's easy to say stay the course when you look back at eight years of a bull market," he quotes, "but come on, in 10 years, am I really going to get any material returns?" First of all, interest rates are not at an all time low. You could go back to 1980, you could earn 12% on a CD, Treasury, guess what?

Inflation was 15%. So I've always argued the purpose of fixed income isn't actually income. It's the stable part of your portfolio. Who knows what equity returns will be in the future, but stick to an asset allocation. If you can't be right, at least be consistent. Yeah, I mean, there are a couple of different ways to look at that.

Let's assume we're now at the 10th anniversary, pretty close, of the last market high right before the global financial crisis. Stocks have still been the place to be over the past 10 years, even starting from that point. The S&Ps returned, I think, something like 7% annualized. Since then, the worst case scenario is foreign stocks, which returned maybe 2%.

That's still better than bonds, or at least better than short bonds and CDs. So that's one way to look at it. Another way to look at it is if you're rebalancing, you're probably doing some selling of stocks right now. And even if you're in a saving process, if you're using a value averaging path and just keeping yourself at a fixed allocation as you put money in, you're probably just putting new money into bonds right now.

So I don't really see that there's much of an issue, at least in the long term. Your starting point in building a portfolio is the global market portfolio. The global market portfolio is roughly divided into four components-- US stocks, US bonds, foreign stocks, foreign bonds. And I would say that if I was wearing my market strategist hat, which I don't wear comfortably, you could argue that three of those four are relatively expensive.

The one area of the global markets that is not so expensive are foreign stocks. And what I would say is, if you're massively overweighted in any one of those four sectors, in terms of three of them-- US stocks, US bonds, and foreign bonds-- you could have an unhappy outcome.

So make sure that you own at least a portion of-- you spread pretty widely among those four, so that if one of them has a really bad outcome over the next 10 years, you're not too unhappy, and you don't end up with the retirement you don't want. I just mentioned, too, about how the problem changes a little bit when you get to retirement and you start taking distributions, that that will really amplify the impact of investment volatility.

And at this point, with the market run-ups, you may be ahead of schedule, as Bill says. If you've already won the game, stop playing. So if you are getting to the stage where you're going to be taking distributions from your assets for retirement, this is a good opportunity to think about locking in some of those gains, moving some of that into individual bonds to cover short-term retirement expenses, or even simple income annuities that will provide that lifetime income.

Yeah, I would agree with that. I write a lot about this bucket approach, and I know some of you agree with it. Some of you don't agree with it. But the basic idea is, if you are looking for cash flows from your portfolio in this very low-yield environment, your best source of cash flows, if you're retired, if you have equities in your portfolio, are hiding in plain sight, and that's selling some of your equity position down and filling up some of the positions in safer assets.

So I think that that strategy makes a lot of sense. There's often this temptation when we have these little bouts of market volatility, and we haven't had many recently at all, but people sort of rush to say, "Everyone should sit tight. No one should sell." And I think, you know what?

In the past few years when we've had these little shocks in the market, use those as impetus to sell as kind of a wake-up call of what it can feel like when things are falling. I apologize if I'm stating the obvious here, but when expected returns are low, asset allocation only goes so far to solve the problem.

Often what you need to be thinking about is saving more if you're in the saving stage, or spending less if you're in retirement. Asset allocation can help, but think about other things, too. I hesitate to utter the word "Social Security" in Mike's presence, but there's another thing here which is unsaid.

I think it's obvious to everybody up here, but just to state the obvious, which is that before you buy a TIPS ladder, before you buy an annuity, spend down your retirement assets so that you can defer Social Security until 70. That is the best annuity that money can buy.

Okay, so the next question has with overweighting different asset classes. Four different responses, or five different questions about this. Joel Goodman says, "Does investing in dividend aristocrats provide some kind of a downside protection?" Trey wants to know, "Why don't I buy some high-dividend stocks to protect myself?" Steve Lelulio says, "How would you allocate emerging markets as a percentage of your total international assets?" In fact, I think Jonathan wrote an article endorsing emerging markets, and from Brent Hunsberger, "Is there a value premium still, and if yes, how would you convince an investor of that?" So they're all about overweighting different sectors of the market.

How do you feel about that? Bill. Gosh, well, let me do the last two, which are emerging markets and then factor tilts. Emerging markets, the conventional wisdom is that about 10% of your equity portfolio, so if you're 60, 40, 6% of your total portfolio should be in emerging markets.

I've always thought that's a little high, and the thing I like to say about emerging markets stocks is the nice thing about them is that from time to time they get to be really cheap. This is actually one of those times. They're still probably the least expensive segment of the equity markets around the world.

So I mean, I think now is the time to maintain a good weighting in emerging market stocks. Factor tilts, again, that's almost completely an imponderable. It's a risk premium, and it's probably more of a risk premium now than it ever was. And the risk is that you're going to underperform the market, which in fact value stocks have done over something like the past 10 years.

And the other problem is that everybody else is chasing that factor as well. It was the case 20 years ago, there was really only one company that chased it well, and that was DFA. And now there are other companies that do it, so there's more capital that's thrown up against it, that's thrown into it, and I think the returns are going to be lower.

And so I think that whatever advantage the factor tilt had over just owning the total stock market is less than it was. I think it's still there, but I'm less enthusiastic than I was about it 20 years ago. Hey, Bill, can I ask you a follow-up question on the EM issue?

Because I have heard this, that EM emerging markets may be cheap relative to the rest of the world. But I guess the thing I wonder about is if we're concerned about the U.S. market maybe being a little expensive and potentially subject to some volatility, I mean, since when does emerging markets not tumble when the U.S.

market tumbles? That's my concern about recommending that people look at EM. That's a good point. There's no question that if the S&P 500 goes down 5% tomorrow, the emerging markets indexes will be down by a lot more than that. And if that's your definition of risk, then they are certainly riskier, and that's certainly a concern.

I view risk in a very sort of Spockian sort of manner, at least I try to, which is long-term risk. So that when I look at, say, the 10-year period, the most awful 10-year period you could possibly imagine, which would be the one between, let's say, 2000 and -- excuse me, 2000 -- well, 1999 and 2008, all right, it's a 10-year period, you had two awful bear markets in there, and you found that emerging market stocks, although they tumbled something like 65 or 67% from top to bottom from '07 to '09, over that whole 10-year period, emerging market stocks had triple-digit total returns, all right, whereas the S&P 500 lost 20%.

So I think that in the short term, you're right about valuations. In the long -- over the very long term, if you're looking at long-term risk, I think valuations are what drive risk, and that valuation risk in emerging market stocks right now, I think, is a lot lower than it is in U.S.

stocks. In other words, I think we're set up for another period that may look like from 1999 to 2008. So are you saying we should overweight emerging markets or keep our allocation the same? I'm saying that perhaps 10% of your total equity portfolio is not inappropriate right now, and, you know, if they do really bounce back, you should probably look to trimming that back.

Boy, is that a non-Boglehead thing to say, but yeah. You know, I may be disagreeing in public with the smartest guy on the planet, but, you know, I charge $450 an hour to tell people that I don't know the future, and it's really good advice. I did not know that international was going to outperform the U.S.

this year, and if I had had a crystal ball knowing what's going on with North Korea right now, I would have avoided the Korean stock market, and South Korea I think may be the single best-performing emerging, well, depending upon whether you call it emerging or developed markets, because the Vanguard emerging market doesn't have South Korea, but predicting the future is a really hard thing to do, and like I said, small-cap value, the factor tilting, more money has poured into cap-weighted indexing, even on a percentage basis, than what Vanguard calls, I'm sorry, what Morningstar calls fundamental index, or strategic beta, smart beta in other words.

So money tends to flow to whatever has done better, and that consistency is incredibly important, and again, that means you have to sell. I had to be buying international in spite of what Jack was telling me, and Jack, I think the world of you, but just stick to owning the world and owning, I would say, three out of four of those sectors, I still think international bond, even with Vanguard's product, is expensive.

Just to put a quick plug in for emerging markets, I mean, the reason that I'm such a fan of emerging markets, and I would encourage people to have at least a market weight holding, is because of demographics, and as people say, demographics are destiny. If you look at the U.S.

economy, historically, we've had 3% real economic growth, 1.5% of that has come from increasing the size of the civilian workforce each year, and the other 1.5% has come from productivity gains. We already know what the story looks like for the years ahead, it's about 0.5% a year in terms of growth in the civilian workforce, versus 1.5% over the past 50 years.

That means that we're going to lose one percentage point out of economic growth. I don't care whether you're a Republican or a Democrat, or you're not meant to talk about politics on this panel, economic growth is going to be slower. We're going to get something very close to 2% long run economic growth, not the 3%, and all the political promises in the world are not going to make any difference to that.

By contrast, if you look at emerging markets, their demographic problems lie roughly 60 years into the future. I don't know whether I'm going to be out of emerging markets by then, but I think I will be gone from this earth. So at least for the rest of my life, emerging markets seem like they should have a permanent part of my portfolio.

Okay, thanks. The next question is going to be aimed at Dr. Wade Fowl since he studies this subject. Studies show that people are not saving up enough. This is from Mel Turner. I think I know that guy. He says, "Average savings accumulated at 65 is around $100,000. Defined benefit plans are being phased out, only 14% of the people are covered.

Average workers contribute half of what they should be contributing. Social security is unsustainable. The Center for Retirement Research at Boston College states that 53% of the working age households were at risk of having inadequate retirement resources. So what's the outcome of this? How does this end?" Yeah, that's a great question, and I do tend to focus more on the people that have been saving.

But in terms of solutions for the Americans who haven't been saving enough as they should have been, part-time work to the extent that that's possible will help to fill some of the gap. And then the two major assets for American households are their social security benefits and their home equity.

And they just need to really make sure that they make good decisions on both with at least a high earner generally delaying social security to 70. And then with home equity, just thinking about how to, for example, with a reverse mortgage, be able to include that as part of the retirement income plan and help support some retirement spending from that.

Otherwise it is going to be tough. A lot of Americans will simply be living on their social security benefits. And at some point there may be some cutbacks, although I think it's way too dramatic to assume zero social security benefits in the future, as I know is a common rule of thumb for planning.

But no, it's going to be tough and people will struggle. Anybody else on the panel have an opinion about how it ends? Bill, you study this kind of stuff. Yeah. Not well. You mentioned the Center for Retirement Research, that's Alicia Manel's group at Boston College. And they've had this at-risk index for the past three decades.

It started out somewhere around, what, 33 or 35 percent were at risk. Now it's 53 percent. And if that sounds bad enough, you have to realize the algorithm they use to arrive at that number, which is they assume that when everybody retires, they take all their retirement assets and they annuitize them.

And it also assumes that they reverse mortgage their homes. So that at-risk percentage is almost certainly much higher than 53 percent. So it doesn't end well. This is sort of an alternative universe within the bounds of this room. But outside of this room, it's not going to be pretty at all.

I read somewhere that there's going to be three trends. People are going to work longer, and you've already seen that. Another one, they're going to turn to annuities as they start to panic because they can guarantee income and reverse mortgages is probably the third one, it's what I read.

So here's a question from Ron Mason. And it was also discussed at our last San Diego Boglehead meeting. It has to do with how much in an emergency fund. It says the usual amount is three to six months of expenses, although some people are saying they have even a year or two years of cash.

How do you determine the amount that should be kept? And should you consider your Roth IRA as an emergency fund? >> I can take a stab at that one. Three to six months is the -- I remember that's the rule of thumb I learned in the CFP coursework. But the fact of life is that for higher income earners, people with more specialized career paths, I think it makes sense to take that higher because it will likely take a longer time to replace that higher earning, more specialized job if it's lost.

And another group that I think needs to think about this emergency funding is the gig economy workers, which I'm sure we all know someone who's working as a contractor or is not a full-time employee somewhere. And if you know any of these folks, chances are you know that they can have long work interruptions, that when they are working, that their work may be very lucrative, but they may have long periods where they're out of work.

So that constituency, too, I think should think about having a larger cushion, certainly than three to six months. Regarding the idea of whether a Roth IRA could be used in sort of a multitasking way, this is something I've written about. I think it actually can be a neat idea for a young accumulator to think about the having at least part of the emergency fund stashed within the Roth IRA.

Best case scenario, you never touch it, but it's there and can be tapped without penalties or taxes if they need it. So it's something to think about. I think you just need to think about what that money gets invested in. And so if that's your plan to stash part of your emergency fund in the Roth IRA, you need to make sure that that money isn't in long term assets, that if you needed to invade it in a pinch, that you wouldn't be selling stuff or run the risk of selling stuff when it's down.

I think the answer is it depends. And if you're a tenured professor at a university, a federal employee, have a very stable job, you need less than if you're working for a startup company, where your employment may end in a day. As far as Roth, and by the way, it's not cash, it's access to cash that you need for that emergency.

And on the Roth, I mean, versus living under a bridge, yes, I would tap the Roth, but the Roth is the last money you want to spend. Just a few quick comments on this, four things. One is we always talk about emergency funds. It's not an emergency fund. It's an unemployment fund.

Any other financial emergency you can think of, you cover it. The dishwasher breaks, you put it on your credit card, you pay it off when the bill arrives. If you have to get a new car, you get the insurance proceeds, you add a little bit of your own money and you buy it.

An emergency fund is an unemployment fund. Second, we're talking about covering, not replicating your income, but replicating your living expenses. So the lower your living expenses, if you're a frugal boglehead, the smaller the emergency fund you need. Figure out what your fixed living costs are each month, and then you keep three to six months of that, depending upon the risk of your human capital, which Alan just mentioned.

Third, as we grow older, we tend to accumulate assets in our regular taxable account. At that point, if you've got $300,000, $400,000, $500,000 sitting in your regular taxable account, what's the point in having a separate emergency fund? I'm not sure there is any point at that juncture. And four, and this actually gets some heat on this, but I'm not sure why, given that an emergency fund is really an unemployment fund, why anybody who is retired would have an emergency fund.

What job are you going to lose? Anyone else? The next question is similar to the one that Tater asked, and it's from Stuart Halpert, and it just happened to us the other day. Kathy likes the aisle and I like the window, and the guy that sat between us is 26 years old, and he said, "Where are you going?" I'm going to an investment conference, and boy, it set him off.

He starts talking about expense ratios, and the next thing he starts talking about, I'm buying stock now, and I made money here, and I made money here, and I said, "Do you know the stock market goes down sometimes?" but he, 26, he had never seen it go down. It was only up, and I just went through my head, what do I say to him, you know, to convince him?

So this is from Stuart Halpert. He says, "This is a toughie. If you have to make an elevator pitch, that is, you have about 45 seconds or less to sell passive investing as compared to active investing, better known as a dark side, what do you say?" So consider yourself coming down the Empire State Building.

You can take as much time as you want, but if you could give some feedback on that. I would say your odds are about the same as being obese, smoking three packs of cigarettes a day, and living to age 100 over your lifetime on the active investing. Mike, what would you say to him?

I mean, I would just turn to what Jack always says. The math shows that the average low-cost, passively-managed dollar will and must beat the average actively-managed dollar, so you're just playing your odds. That's all there is to it. Sort of along the same lines. I mean, the logic is brutal.

Before costs, investors collectively match the performance of the market averages. After costs, investors collectively must earn less. If you hold down your costs, you're going to lag the market by less than other investors who are incurring the huge expenses charged by actively-managed funds, and thus over time compounded, you're going to accumulate far more money.

You have to add one more thing to that, which is the comeback to that is, "Yes, I'm going to pick only the best active managers," and you have to know the comeback for that as well. But, you know, 45 seconds in an elevator, I try to avoid doomed people, so I wouldn't even make the effort.

Well, there's also an idea, too, that people are used to thinking you have to pay more to get quality, and that's just simply not the case in investing, and so maybe to try to chip away at that notion that there's really no such thing as an expert who can pick investments better than the index.

So you're really just wasting money at that. You don't get better quality by paying more when it comes to investing in finance. Christine, what would you say? Well, maybe to offer a little bit of a contrarian view on costs. One thing that, certainly costs matter, but we find that when we look at the lowest cost, say quintile of active funds, actually you have a fighting shot at beating an index, so it's just costs matter.

Whatever product type you choose, and certainly ETFs and TIFs have lower costs, so that's a nice, simple way to run a portfolio, but if you choose the subset of low-cost active funds to look at, that you probably have a fighting shot at doing reasonably well, too. Anybody else? The next question comes from Lady Geek, and I put the question in, there she is, right here.

I put the question in, and then I said, "You know, that's a silly question," and I took it out, and then I started thinking about it, and I figured that Lady Geek knows more than I do about what's going on on the forum, and what's being discussed. The question has to do with cryptocurrency.

Does everybody know what that is, like bitcoins and blockchains, and all that kind of stuff? So the question is, from Lady Geek, says, "The popularity of cryptocurrency in the Bogle Heads Forum has exploded exponentially within the past month. We have a number of forum members who are enthusiastically helping investors on the appropriate amount for their portfolio.

Unfortunately, new investors are assuming this activity means they should hold cryptocurrency in their portfolio. To stem the tide, we've put a 5% recommendation. Can you elaborate on the role of cryptocurrency in people's portfolios?" I'll give my opinion. It's going to be the last person holding the bag. So what do you think?

I just bought Bitcoin. Let me explain. I wrote about it for AARP, and as I was learning how to buy it and the like, I really felt like I needed to actually buy it to make sure that everything I was writing was accurate. And what do I think my 200—by the way, my $200 is now worth about $250.

$250 or $2,000? $250.00, not comma. What do I think it'll be worth in five years? Probably zero. But it does solve some problems. I mean, it really—there's 2.3 billion people that have smartphones but not bank accounts. There's no 4% commission that the credit card company charges. There will never be more than 21 million Bitcoin.

On the other hand, there's over 1,000 cryptocurrencies. Who's to say I can't invent Rothcoin that does better than Bitcoin? So I personally am not going to buy more than what I bought. But it's not a completely baseless item either. Does Morningstar follow cryptocurrency? No, not yet. In fact, I was just thinking we had a thing going around the office a couple weeks ago.

It was some internet joke about like your own craft beer could be named after your grandfather's profession plus some concept that you don't understand. And one of my colleagues said, "Candyman Bitcoin." We just don't feel like we have our arms around it. It's not to say that we would never cover cryptocurrencies in some fashion, but I don't know that anything's on the radar in the near term.

I'm definitely not at all an expert in cryptocurrency. General principle I follow, though, is that I'm not eager to add anything new to my portfolio ever. I'm happy to watch it and learn. So happy to hold zero, probably will be happy to hold zero for another decade and then we'll see.

Yeah, there's another thing here which goes unsaid, which is that people get confused by Bitcoin and they're not able to separate out the asset itself, which is almost certainly a bubble, from the technology, the blockchain technology, which may or may not prove to be extremely important and transformative. But you're not going to profit from that by buying Bitcoins.

So with that, I'd like to go back to a subject that you touched on, but it wasn't a direct question. Four people asked about it, Tim Sung, Joel Goodman, SimpleSauce from the Boglehead forum, but I'm going to read Andrew Jacob's question. I'm going to direct it at Jonathan first.

He says, "In Bogle on Mutual Funds, Mr. Bogle explains why international investing has risk and perhaps investors should keep their money on U.S. stock. It concerns me that virtually no other passive investing author agrees with Mr. Bogle. Can you expand more on the risks that Bogle discusses and if international stocks and bonds are even necessary?" Sorry, Jack.

So we go back to the market portfolio. Four quadrants, U.S. stocks, U.S. bonds, foreign stocks, foreign bonds. I do not hold the global market portfolio, even though as an indexer, arguably I should. Because the global market portfolio reflects the wisdom of all investors worldwide. They've voted with every security they bought and sold and decided that this is the fairly valued collection of securities that you ought to have.

As a U.S. investor who will retire and buy wheelchairs and early bird specials and nursing homes in U.S. dollars, I am not willing to have quite that much foreign currency exposure. So when I build my portfolio, I focus on just three of the four. I don't own international bonds.

I just own international stocks, U.S. stocks, and U.S. bonds. These days I own them in roughly equal amounts. If I do that, I end up with about 30 percent foreign currency exposure, which I think is a bit high. But once I get to retirement, I intend for it to be somewhat lower.

So I do believe that there is currency concerns in investing too heavily in the international markets, which is why I don't own international bonds. But I also do believe that including international stocks in a portfolio not only adds important diversification, it not only gives you exposure to a part of the global financial markets, which is arguably cheaper than the other three major sectors, but finally, and this is one thing that doesn't really keep me up at night, not very much does, but the one investment concern that sits in the back of my mind is what's going to be the next Japan.

If you were a Japanese investor in 1989 who had a strong home bias and you were fully invested in Japanese stocks, a quarter century later you would not be a happy camper. I, on the off chance that the U.S. market turns out to be the next Japan, which I don't think it will be, I think it's a very low probability, but we talked about Pascal's wager earlier today, we have to think not only about probabilities but also about consequences.

If perchance the U.S. stock market turns out to be the next Japan, I do not want to have too many of my eggs, I don't want to have the majority of my eggs in that particular basket. Yeah, the thing that I like to say is I can't predict the future, therefore I diversify and I live by that, and the only problem with that is that diversification works whether you want it to or not, and what I mean by that is in the past 10 years that foreign diversification hasn't worked well, but if you believe in mean reversion, that means that your odds are pretty good going forward, which is also based on valuations.

So Alan, what's your opinion on this? I have half the amount of stock that's recommended by Vanguard, I have zero international bonds, you know, half the amount of international stock. Is that wrong? I do own Vanguard International Bond, but really the same thing as Bitcoin, I stuck my toe in the water when it first came out and I haven't bought any more of it.

But, you know, I wouldn't only buy Colorado stocks, so therefore I argue we shouldn't only buy U.S. stocks, we should also own some international. I overweight the U.S., and if I had access to a low-cost index fund to buy stocks in companies from other planets, I would do that.

Jack, can you launch that please? One point I would make on this whole thing is, and we've looked at this at Morningstar, is this issue of country of domicile as being the organizing principle behind what gets classified as a U.S. stock and what's a foreign stock, and as we all know, many of these companies, whether U.S.

or foreign, are very global. So it's feeling more and more like a vestige of a bygone era to be looking at country of domicile when deciding what's a U.S. or foreign company, which I guess is a long way of saying that I think the more diversified you can be, the better, because the organizing classification system for foreign versus U.S.

just isn't very useful. So the next question is aimed at Bill Bernstein, since he studies this. This is from Brent Hunsberger. He's a financial writer. In fact, could I have a raise of hands, how many people are in like the financial business, you know, advice, manage money, write for it, and just a curiosity.

Okay, it's quite a few. But Brent writes, and I know you asked Jack of this, so Bill, if you'd give your response, a lot of discussion that a point can be reached where there's too much investing. Is that possible? Well, if you're an economic historian, you'll say, of course, you know, you get to something I think it's a very obscure term called a periwig society, where everybody is a rentier, where they're just they own bonds or stocks, and they just collect income.

And Jack writes about this, and he writes about this very eloquently. I don't know what the percent of S&P earnings are for financial services companies, but it's on the order of, what, 20, 25 percent, something like that. Yeah. Jack, Jack nods, and he says, yeah, that's about right. And that's too much.

All right. The job of the financial sector is to reallocate capital, and it is not healthy to have that part of your economy be that big. I mean, think about a society in which 90 percent of corporate profits and of income comes from finance. That's going to be a pretty miserable and cruel place.

So yeah, you certainly can have too much finance, and I think we have too much finance right now. You know, if the entire financial industry was replaced by Gus Sauter clones, you know, the industry would be about 99.5 percent smaller. Anyone else? The next question is aimed at Mike Piper.

This is from Abjeet Dittar. I'm sorry I pronounced your name incorrectly. He says, I have a 401(k) at work, and I don't know what to do. Should I dump $18,000 in the first day of the year, or should I space $1,500 a month? If you have the cash flow earlier, it's better.

Well, actually, before you dump in your 18 grand, you should find out how the company matches your contributions, because some companies will match based on the total amount as of the end of the year, and others will match pay period by pay period. So if you put in your 18 grand on January 1, you may find you miss out on the match for all the other subsequent pay periods.

Super good point. Totally wrong what I just said. Could I have that in writing? Everybody's got an opinion, right? So the next one is from Victoria F. She writes on the forum quite a bit. It has to do with fixed income. It's going to be aimed at Alan. Thanks for giving us an opportunity to ask a question.

Here's my question. What are the best current strategies for fixed income securities? CDs, tips, tip funds, bond funds, short-term, long-term, intermediate, and how do you feel about brokered CDs? Yes. My portfolio, by the way, it's roughly 45% equities, 55% fixed income, and by the way, fixed income so far this century has beaten global stocks.

So of my fixed income, I have roughly two-thirds in CDs. So there's two strategies. Strategy number one are banks like Ally Bank or Sallie Mae Bank that are paying what a total bond would pay, and then they have a five-month for Ally, six-month for Sallie Mae early withdrawal penalty.

So if interest rates ever go up, it's a way of having a put, the right to sell it back. And the second strategy that I use that's probably only about 25 or 30% of the CD strategy are brokered CDs purchased on the secondary market. And the sweet spot tends to be in the neighborhood of a seven, eight-year duration, and those yield an extra 40, 50 bps over the market.

I was meeting with John Emmerich at Vanguard yesterday, and I said to him, you know, because he manages the Quant Active Strategy Group, if he could beat the market by 40, 50 bps, would he consider that successful, and his answer was yes. Well, the CD strategy does beat the total bond by probably 50, 60 bps per year with a little bit less risk.

So that's my strategy on fixed income. I was on a global indexing panel a few months ago in California, and I was going over that idea. And my other two panelists, one was arguing for high-yield bonds, aka junk, and the other one was arguing for safe dividend stocks like Eastman Kodak and General Motors.

And I looked at the two, and I said dumb in front of the much bigger audience than this, dumb and dumber. I think you're right on, Jonathan, on me being controversial. But this is a friendly group. A follow-up to that, Stuart Halbert wants to know, what about my low-risk fixed income?

Should it be tips, treasuries, or investment grade? Seriously, yes. All of them. All. Okay. No junk. So this is for Bill Bernstein. He says, for all my taxable investors in the highest tax bracket, do you have an updated asset allocation for taxable TED? He's the lucky guy to have this problem.

He's in the highest tax bracket. What do you recommend on fixed income? For fixed income, again, I think that the taxable bracket is not really that relevant. It's really more important that you diversify. The lion's share should be in CDs and in treasuries. If you're really high income and you have a very large amount of assets, Alan's strategy of doing brokered CDs in the secondary market is going to be very hard work, because those are bought in generally very small lots.

But if you've got the time and nothing better to do, it's a good way of earning the 50 or 60 extra dips. And then, you know, what part do munis play? We have a 40% limit in our practice on munis, no matter how much assets you have. They may be a little more tax efficient, but they're also riskier as well, particularly in the teeth of the financial crisis.

So it's really, really, you know, your income and your tax bracket really don't impact that very much. I think the strategy is the same for everybody. Any other comments? This is from Joel Goodman again. He says, "You're all writers, and you all get feedback from the articles you write.

What has been the most interest of articles that you've written, and which one has generated the most disagreement with your readers?" So when I was at the Journal, and even with my own site now, you know, if I'm feeling a little down and I want some audience appreciation, you know, I'll write either about money and happiness or about how I've helped my kids financially, and, you know, the page views just light up.

It's like crack cocaine. I feel so good by the end of the day. In terms of controversial stuff, one of the pieces that I remember from recent years was a piece where I wrote about why you shouldn't have a budget. And basically the argument was, as long as you're saving enough, it doesn't really matter how you spend the rest of your money.

I was really surprised. I got a boatload of hate mail on that. It seems that, you know, just having a budget is a sign of virtue, and if you're not doing it, you're a wayward individual and you're destined for hell. I would say annuities, bank on yourself whole life type of schemes, gold.

That's where I get the most amount of hate mail and the occasional threat to be sued if we don't take it off the site or withdraw it or something like that. And I don't do it to make people mad, and I'll admit, by the way, paying my kids college tuition or having you all come to a free dinner seminar to sell you something with all the upside of the market, no downside risk, I would do it, and I would probably think I'm the force for good, and you guys will be so sorry when the market goes down.

Back in late 2011, Vanguard changed the allocation in their life strategy funds. It used to have an active management component, and they got rid of that so it was all passively managed and the cost went down as a result. So I switched at that time from having a DIY allocation of index funds to putting 100 percent of our retirement savings into the life strategy growth fund, and that was probably both the most disagreed with article as well as the one that people got most excited about.

There were so many people who thought, "This is something you spend so much time on and you're just punting? You're just putting it in this one fund of funds and calling it a day?" And then there were other people who thought that was awesome. They were looking for permission to do the same thing, and I had just given it to them, basically.

Yeah. The one that probably got the most positive review was the one where I – it was an article I wrote in the journal, which has already been quoted as, you know, to stop playing the game. Once you've won the game, you stop playing it. The one that got the most vehement reaction by far wasn't one that I wrote, but that I was quoted in, and I was asked to comment on the portfolio of a prominent political person that was very heavy in precious metals equities, and I said that it was one half step from a cellar full of canned goods and 9mm rounds.

And for some odd reason, that got a lot of negative political comment, but I can't talk about that anymore, so. Christine, how about you? You put out a lot of information. Oh, thank you. I would say of the things that I've written that have gotten the most positive feedback, probably the things that I've done around the topic of elder care, helping my elderly parents through their final years and dealing with dementia, with my dad's dementia issues and the financial and the many other implications of something like that.

I think there's a lot of pent-up demand for people to share their experiences, so there was a lot of feedback on what I wrote, but also just people wishing to share their own experiences and learn from one another. So that was and has been a great learning experience for me.

In terms of areas that are the most contentious, gold certainly is one. I don't tend to write about it really at all. Anything around Social Security and anything that gets people into that quasi-political zone would tend to set off food fights, not so much at us, but a lot of sparring among our users.

In terms of a piece that I would say generated a lot of constructive discussion, one was about the role of Social Security in your asset allocation, whether Social Security should affect your asset allocation in any way. There was a lot of great discussion there with people favoring different approaches to that particular issue.

How about an article that created hate mail? Nothing jumps to mind really. I can't think of a good example. I certainly do receive my share of feedback, both negative and positive, but I can't think of any one topic that generated a lot of negativity. It's hard to hate Christine, it really is.

I'm a much easier target. Wade, how about you? You've done some controversial retirement withdrawal things. Yeah, so the most popular article I wrote was a really dry piece just reviewing statistics on how long people live past 65, so I have no idea what drives reader interest. It's really hard to predict in advance what's going to get more page views versus something else.

But yeah, with controversial topics, a lot of it relates to the investments world still hasn't caught up with how retirement changes and when you take distributions, how that amplifies the impact of market volatility. So much of it is based on assuming an 8% rate of return every year or something like that.

And it doesn't link the assets to the liabilities, the fact that you have to match those assets to liabilities. So when I try to explain how simple risk pooling with a simple income annuity is a cheaper, more efficient way to meet retirement expenses, that can generate a lot of controversy.

Anything I do with regard to the 4% rule, and I really just got started with that because I looked at the international data and the 4% rule only worked in the U.S. and Canada and there were 18 other countries where it didn't work, so that got me started on that kick.

But people really want to have faith in the 4% rule and so I get some negative comments in that regard. What about increasing your asset allocation as you age past retirement? Yeah, so the rising equity glide path I never meant to really be advice for people to use in their portfolios.

It was more just the point that with lifetime sequence of returns risk, you want the lowest stock allocation when you're the most vulnerable to losses and that's at the retirement date. And as a natural consequence of spending conservatively, a lot of people may just see their stock allocation increases in retirement.

It works as a risk management strategy because worst case scenarios for retirees are bad market returns early in retirement, good market returns later, and that's exactly what the strategy would protect. But I understand there's a lot of behavioral concerns about trying to implement it and so when people point that out to me, I can accept their criticism in that regard.

What do you recommend as an allocation? Somebody right at retirement and how high do you take it back up after retirement? Well that really just depends on a case-by-case basis about their risk tolerance and risk capacity. But the examples we were looking at were things like rather than keeping 60% stocks throughout the whole retirement period, start it at 30% and increase it back up to 60%.

So something in that ballpark I think would be an appropriate way to represent that strategy. Anyone else? Yeah, I just would amplify on that a little bit, which is I tend to separate people out into sort of a spectrum, so all the way at the right side of the spectrum is the person who's only got five or ten years of residual living expenses saved up.

In other words, they can fund the retirement with fixed income assets for five or ten years and those people are in very deep yogurt and should probably pretty much annuitize everything they have after they spend down to get that Social Security at 70. And someone who's got 30 or 40 times their residual income, which is probably going to be a lot of people in this audience, can probably own a very big chunk of equity because that money really isn't theirs.

It's going to go to their heirs. And then finally, you've got the person all the way to the other side of that spectrum who has some ridiculous amount of assets, 60, 70, 80, 90, 100 times their annual living expenses. And that person is in the Warren Buffett situation. They can put almost 100 percent of their assets into fixed income because just the dividend yield alone, even in the worst case scenario, is going to see them through, if they're that risk tolerant.

The number of people who have both that risk tolerance and that amount of assets is vanishingly small though. I meant stocks, I'm sorry, yeah, that's what I meant to say, yeah, sorry. Anyone else? The last question, there's going to be two more questions and then we're going to have the panel just pass on words of wisdom that they learned over the years.

I mean, after all, we look at our portfolio, they live with their portfolio, they do it all day. But the next to last question is about long-term care insurance. I remember five years ago, we asked the question to Bill Schulzeis. His answer was, "I don't know, what do you think?" And that was his answer and he wouldn't go any farther than that.

So what I'm going to do is bring it up again. What do you think about long-term care insurance? When should you buy it? How much should you buy? What's your opinions on that? It's tough. If you don't have a lot in assets, you shouldn't buy it. If you have a lot of assets, you should self-insure.

It is pure insurance and I believe in insurance. The problem is you can't buy a policy outside of a hybrid, which has other problems where the rates are fixed. And so many people are coming to me after paying for 10 years, getting a 50, 100% increase. And they don't know what to do because now they're 10 years closer to needing it.

So it's a very tough call. And we tend to think of how much we're going to pay when we're in long-term care. But we fail to think about we're no longer going to need a house, a car, insurance, eating out, traveling, et cetera. So you have to take that into account.

And then long-term care covers a nursing home. There are things that we're going to need in between probably that aren't covered. So it's a very tough call. I don't have it. There are four options to fund long-term care, self-funding, Medicaid, which is by far the biggest provider of funding, the traditional long-term care insurance, and then the hybrid policies that connect long-term care with either life insurance or an annuity.

And one area to emphasize, I know a lot of people plan strategies to protect assets to be able to qualify for Medicaid. And I think that may be a mistake with demographics. If you can afford to pay for your long-term care, you probably are going to feel pretty bad if you're in a situation where you're in a Medicaid-funded long-term care facility.

So I would caution people against specifically trying to plan strategies so that Medicaid would pay for their long-term care. The traditional long-term care insurance has had a lot of problems. Policies today should be in better shape because part of the problem was just interest rates coming down so much and staying at low sustained levels.

The insurance companies hadn't planned for that, as well as just the lapse rates were not as high as insurance companies were expecting. So today's policies should be priced better in terms of not seeing as many premium increases. And just as you can't wait too long to get long-term care insurance because at some point you may no longer qualify.

The rule of thumb, sweet spot, tends to be around age 50 to start thinking about that. But certainly younger or older could still be appropriate. John, what's your opinion on it? I really hate the long-term care question because I just don't think there is a good solution. The good solution is to be a bogal head, save a lot of money, index, and make sure that you have more than enough assets so that you don't have to buy long-term care insurance.

That is the good answer. For people who are in that difficult spot between maybe $300,000 and a million dollars in assets who need to consider long-term care insurance, you know, I would hold your nose and buy either traditional or hybrid policy. But I find it really tough to recommend policies because, you know, this is an area where once again the insurance industry has not covered itself with glory.

I've had so many emails from people over the years, bought long-term care, you know, held it for years, and then the insurance companies come along and asked for a premium increase that they simply cannot afford. And you know, I don't want to be responsible for people ending up in that bind.

I wish that we could get to a point where there was a long-term care insurance product that people could buy that I could happily recommend. Yeah, I do this annual compendium of long-term care statistics, and one number really jumped out at me, and I don't have the specific, but it was something like 10 years ago there were 50 companies selling long-term care insurance.

Now I think there are like eight. So there are simply companies getting out of that business altogether, many companies, and since when is that sort of environment ever good for consumers? So the hybrid products, Alan, you mentioned them, and they seem to be coming on strong and replacing the straight long-term care policies.

I'm curious, have you done any work on those? Because I haven't examined them in detail, but it seems like they're kind of tricky to cost compare and not as transparent as they could be. I have, and a hybrid comes with a whole life component, and it's just extra. Or an annuity, right?

Yeah. I mean, those are the two types. So they're just extra fees in there, and then as I tell my clients, what they're really doing when they're buying long-term care is protecting money from the errors against the fact that they may spend, statistically very unlikely, especially for men, to spend 10, 12 years in a home.

So what they're really doing is protecting their kids, protecting their heirs, and that's not the main purpose of the portfolio. And I also point out that, statistically speaking, since the insurance companies and the agents expect to make money, they're likely to leave more money to their heirs if they don't have it.

Yeah, let me just go around and ask the other panel members. Alan, I think, threw out a figure that implicitly said at a million dollars of assets, you don't need long-term care insurance, or maybe Mike did, I forget which of you did. It was you. Okay. Well, the bottom line is that, do other people agree with that?

Do the other panel members think that a million is sufficient to avoid long-term care insurance? I don't. I think that you would need more, and I always share my personal experience on this front, which is that my dad needed long-term care, which we had provided in the home for several years and then eventually determined that it was going to be a better setting, safer setting for him to be out of the house in a long-term care facility.

But at that point, my mom had developed a care need. So we had two, my parents had been advised to self-fund long-term care, and they were fine in the end, but we had two long-term care funding needs going on at the same time, and that can happen legitimately with married couples where they need care delivered in two different settings.

So that's another thing to keep in mind, that I think those thresholds or the rules of thumb for when you'd want to self-fund long-term care, I think that people should set the bar a little higher than maybe what had been used in the past. Can you give me a number?

I can't, Bill, really, but I would be nervous about setting one million as an appropriate threshold to think about self-funding. Yeah, that's what I was going to touch on, that's implicit in what Christine is saying, is the threshold definitely has to be higher for a married couple. And Wade was talking about this a little bit earlier, is that Medicaid will step in at some point, and for an unmarried person, that's not so, it's a better situation being Medicaid-provided care rather than a married couple, because for one of two people in a married couple to qualify for Medicaid, the couple has to spend down their assets.

And there's some protections for the other spouse, but they're limited. So if spouse A needs long-term care and has to spend down their assets to qualify for Medicaid, spouse B can be in a bad situation. Right, and just one other comment about couples. Because women tend to live longer, they tend to, you have some risk-sharing within the household, but it's often the wife takes care of the husband, the husband dies, then the wife needs long-term care after that, so she's really in a more vulnerable position.

And so when you're thinking about any sort of long-term care protection to have that in mind as well. And the wife is likely to live longer in long-term care. So there's an argument that if you're going to buy it, especially if the two spouses are the same age or the wife is younger, to buy more for the wife.

And you could easily go through a million dollars, number one, you can spend that down to $300,000 before you go into the home, and therefore you might not have enough. So it's hard to say, and it also depends on how nice you want the nursing home to be. Okay, the last question has two parts to it.

One is, how do you encourage young people to take an interest in becoming financially secure? It's more of a motivational question, since you're writers, you're always motivating people. The second one, since this is an advanced group, most of us have made it, we've become financially independent, how do you give assets to a younger generation without decreasing their ambition?

Well, Warren Buffett put it very nicely, he said he wanted all of his descendants to have enough money to do anything they wanted to do, but not enough money to do nothing. And that's good advice, basically what he's saying is you pay for education. A good way to give money to children is you can endow them, you can give them a fair amount of assets and have them have substantial portfolios, but they have to know that you're watching, and they have to know there's more money behind that coming from you when you pass away, and you're going to watch and see how well they steward the first aliquot.

When they're eight years old, do you have them help you write a book called How a Second Grader Beat Wall Street? You know, it is really hard to convince people that they need to save, and probably one of the biggest ahas in my practice, which should have been obvious, is people that came to me saying, "Can I retire?" Those that thought, "Oh my gosh, I'm pretty sure I can," in two years, had maybe a $50,000 net worth.

Those that said, "I'll never be able to retire," in some cases had tens of millions of dollars. And it's the fact that those that weren't concerned about retirement never learned to defer spending, and you can invest like Warren Buffet if you're not saving anything, you're not going to get to retirement.

So I don't have a particularly good answer to how you get somebody to change behavior. You know, the client that comes to me that hasn't saved anything needs a psychiatrist or psychologist, not me. I've written one of my monthly newsletters this year, which is devoted to this whole topic of ambition, partly because I see what's going on with my kids, and I see what's going on with a number of their friends.

They all grow up in comfortable, upper-middle-class households, and almost universally, they are not driven to make money. And I look at that, and I think, "Okay, maybe that is the privilege that comes with an affluent society that we raise kids for which making money is not their uppermost concern." I've sort of made my peace with that, but what I worry about is kids who have no ambition.

So even if you're not driven to make dollars, at least you should be driven to make the world a better place. And fortunately, my kids, even as they are not driven to make money, do seem to be driven to make the world a better place. My daughter works for an education non-profit, my son is getting a PhD in Middle East history at Yale, neither of them will be rich.

I worry more about their friends who graduate from college, I hear this again and again, and they graduate from top universities, Harvard, Yale, Princeton, and then they just drift. Two years traveling the world, only to return to become a barista. And that really concerns me, not because they're not doing anything with their lives.

What concerns me is, and I hope you all feel the same way, that there is great pleasure to be had in working hard at something that you think is important and you find challenging and you're passionate about, and they're missing out. And that really bothers me, and I'm not sure how to inculcate that ambition other than to talk constantly at home about how wonderful it is to work hard at something that you think is important.

They don't have to go out there and want to make multi-million dollars, but you want them to go out there and want to change the world. So there was a two-part question. As far as getting young people interested in investing, I guess it depends how young we're talking about.

If they're just out of college and they still don't quite get it, I don't really know what to say. But I've told this story a number of times. It's what my mom did with me when I was eight or nine, maybe. She gave me, or maybe suggested I bought it with some savings, I don't honestly remember.

But it was a share of Procter & Gamble stock, and we went to the grocery store, and we looked at all the different Procter & Gamble products there. And there's a million. I mean, a ton of things that you see in your house or in your friends' houses, and kind of explained that any time somebody buys one of these things, now as a shareholder, you're going to earn a little money.

And it was so tangible, so concrete. And it was a big thing for me. And I'm tearing up talking about it. So it was a big deal. I thought it was the neatest thing in the world. And we didn't talk about mutual funds or the fact that the share price goes up and down.

It was just, you own this business, a small, small piece of it. And when people buy the products, you can make some money. And that's powerful. And I thought that was so cool. Yeah, just one or two more things on the spending side. Your kids learn from example. I mean, if you're driving a 20-year-old Honda and are living in a small house, you've done your kids a service.

If you're driving a Beamer and living in a McMansion, you probably doomed them. And I had thought I had done everything that I could possibly do to make my kids frugal. And I thought I pretty well succeeded until I read a column that Jonathan wrote, which he gave me two extra little wrinkles that I hadn't thought of and I kicked myself for not thinking of, which is, number one, you give them their allowance through an ATM card so that they're not asking you for money.

And when the money's gone from the ATM account, the bank account, it's gone. They have to wait until next time. And the other one, which was even more brilliant, was to give them a dollar every time they could do with water at a restaurant instead of buying the soda.

Okay, we are at the end of it. We appreciate you giving your time and all your words of wisdom and all your investment knowledge. You've each got one minute to give us a gem, just something that you've learned over the years that you think is really valuable that you'd like to pass on.

If we could just go down the panel, Christine, could you start it? Sure. I guess the point I would make or one piece of wisdom is even though a lot of folks here, in fact, most of you here may be do-it-yourself type investors, get some help as you get older.

Get some sort of an investment buddy, whether it's a trusted adult child who you think is reasonably financially savvy or whether you take the step of hiring some sort of a fee-only financial advisor. Just get some help to keep your plan on track in case, for whatever reason, you're unable to do it yourself.

I think that's my one piece of advice. That's great advice. I think really most of the wisdom I've received about investing came from the Bogleheads community, so I don't really have much to tell this group. I could probably talk longer to other groups, but keep it simple, low-cost, and focus on the long-term.

The one thing that I missed, that I realized way, way too late, is that the risk of owning stocks depends upon how old you are, so that if you're very young and you're constantly adding money and you're constantly saving, stocks are not risky at all because at some point you're going to wind up buying very low and you'll wind up doing very well.

On the other hand, for the reasons that Wade explained, if you are someone who is in the distribution phase, then stocks are three-mile island toxic, dangerous as all heck. I wished that I had understood that at a much earlier age. I'm sure that you all imagine that we who write, write for you.

That actually is completely fallacious. We solely write for ourselves, and every time I write on a topic it's because I'm thinking about it in my own life. One of my hobby horses in recent years has been this notion that the distinction between working and retirement ought to disappear. It's a horrible separation.

What we should start to think about is how we can have lives where, as I was mentioning earlier, we can engage in activities that we think are important, we find challenging, we feel we're good at, that we're passionate about, and how we can do that throughout our lives, and that doesn't change when we retire.

The only difference is we don't have to worry about whether that work comes with a paycheck. As you approach retirement, don't think about how you're going to play golf, or sit on a beach, or travel. All those are fine things to do. Think about what you're going to do with those years that's going to give you a sense of purpose, that's going to get you out of bed in the morning, and that you are going to be passionate about, and will make your days feel fulfilling.

I would say beyond the low cost diversification, keep it simple, stupid. Whenever I violate that policy in life, I tend to regret it, and that includes investing. Resist those instincts of what I think is going to happen based on whatever the political environment is, whatever country is going on, etc., and then three, make sure you're not having any fun with investing.

If you're starting to enjoy it, you're probably doing something wrong. Not only should it not be, it should actually be painful. I would love to tell you that I confidently bought stocks in 2008 to rebalance, but boy, it hurt like heck. Don't assume that what people who you think are experts are going to be wrong sometimes.

Just a minute ago, a question was directed directly to me about 401k contributions, and I got it 100% wrong, and Jonathan jumped in, fortunately, and covered for me, but that'll happen. It happens in articles and major publications. You'll see things about taxes or social security that just aren't right, so before you make any irreversible decisions, double-check things.

Check with more than one source, and similarly, to flip it around, sometimes you'll be the one making the mistakes, so double-check your own conclusions. If you decide something, there's a good chance that there's some information you haven't considered. Again, before making any big decisions that you can't switch, double-check, both double-check your own reasoning and double-check whatever sources you're relying on.

Let's have a hand for the panel, and we'll start back up at 1 o'clock, 1 o'clock in here. Thank you. 1 2 3 4 5 6 7 8