A Summary and Commentary of Warren Buffett’s “2018 Letter to the Shareholders”

Nate Williams Financial Planning, Investments 1 Comment

Each year Warren Buffett, the greatest investor the world has ever known, writes a letter to the shareholders of his company, Berkshire Hathaway. This letter has become somewhat of a “secret scroll” for investors and business geeks alike, with Mr. Buffett pouring out wisdom and wit in his typical style of brutal honesty. I have been reading this annual letter for years and recommend it to you if we share this interest. (Last year, I summarized Buffett’s 2017 letter on this blog, which you can read here: https://www.practicefinancialgroup.com/investment-optimism/). For those of you who want the summarized version of this year’s letter applied to doctors, keep reading…. Please follow and like us:

Nate WilliamsA Summary and Commentary of Warren Buffett’s “2018 Letter to the Shareholders”

The Looming Market Downturn

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As the second longest bull market in U.S. history continues, many investors are worried about when the inevitable downturn will occur. While few investors enjoy market “corrections,” long-term investors understand they are inevitable, can be expected every couple of years, and are part of the necessary tuition to participate in the stock market. We hear concerns about the market often and its inevitable future downturns. One specific worry we hear is that “the market is at an all-time high.” This is concerning to some because they fear that if the market is at an all-time high, then it must be at its tipping point, ready to turn at any moment; what goes up, must come down, right? Not always. The price of the “market” is a representation of the health of the current (and expectation of the future) overall economy; the reason the market goes up over time is that the economy …

Nate WilliamsThe Looming Market Downturn

4 Charts Every Investor Should Know

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(This blog post, 4 Charts Every Investor Should Know, was compiled and revised from a newsletter sent out by Loring Ward, our investing partner). Sometimes a picture really is worth a thousand words. In this post, I’ll share four charts that I believe every investor should understand. These charts focus on some of the basics of investing, like focusing on the long term, diversification, and not letting emotions drive your portfolio. #1: Let Markets Work for You Good things come to those who wait—and to those who don’t let short-term news events scare them out of staying invested for the long-term. Every generation of investors has had its reasons to worry and pull out of the market from the Great Depression, World War II, and Vietnam of earlier generations, to the more recent Black Monday, dot com bubble, and Great Recession. But if you had invested $100 in the U.S. …

Nate Williams4 Charts Every Investor Should Know

Article Share: “What if Rip Van Winkle Invested in the U.S. Stock Market?”

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Friends, The following article was written by a friend and colleague of mine, Sheldon McFarland, from Loring Ward. I thought the article was well-written and useful on a very important topic – to help us maintain a long-term investment perspective. I hope you too find the information relevant. Best, Nate Please follow and like us:

Nate WilliamsArticle Share: “What if Rip Van Winkle Invested in the U.S. Stock Market?”

Should I Invest In…?

Nate Williams Financial Planning, Investments 2 Comments

One of the most important things we do for our clients is talk them out of bad decisions. In life, the decisions you don’t make are as important as the decisions you do make. Like the decision not to do meth. Likewise, the investments you don’t make are as important as the investments you do make. We were recently introduced to a 65-year-old dentist who doesn’t have anything saved for retirement. Admittedly, he spent his life keeping up with the Jones’. Additionally, he blew his entire life savings (several million dollars, he told us) on a bad investment with a friend. Very sad. My father-in-law, a physician, told me that when he graduated from residency, the director of his program told him to “take the first $500,000 you save and burn it!” When he was asked why, he simply said, “well, that’s what you’re going to do anyways, so just …

Nate WilliamsShould I Invest In…?

Sage Wisdom from the Greatest Investor of All Time

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Annually, the world’s single greatest investor, Warren Buffett, writes a letter to the shareholders of Berkshire Hathaway, Inc. For decades, this letter has been a much anticipated, widely read treasure for business and investing minds as Buffett shares deep wisdom in simple, witty terms. Click here to read the entire letter. In this year’s letter, Buffett praises the American economy and gives sound, common sense reasons for optimism. This principle — optimism, or faith in the future — is the first great principle necessary to achieve actual investment success. The whole idea of investing is that your capital will be used in the creation of something better. Without faith in that process, you might as well eat, drink, and be merry today, for tomorrow you’ll be broke. I wanted to share with you an excerpt of Buffett’s letter discussing this principle of investment optimism. Pay particular attention to what Mr. …

Nate WilliamsSage Wisdom from the Greatest Investor of All Time

Why Investors Should HOPE the Market Goes Down

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Bring on the next recession! The beginning of 2016 tested investors with the S&P 500 falling 10.51% in just over a month, hitting a low of 1,810.10 on February 11. Since that time, the US Market Index has pulled back, almost breaking even with the January 1, 2016 starting point of 2,043.94 with a closing price on March 16, 2016 of 2,027.22. At this point, most investors are wiping the sweat off their brow, breathing a sigh of relief and saying “that was close.” During this volatile time period many of our clients called with concerns over the market decline. After recommending a new investing savings plan, one client texted me saying, “Looked at Schwab account last night…down $15,000…doesn’t make me want to jump into putting more money into stocks.” My response was simple: “When the market falls you should be more excited to buy ownership of companies, not less …

Nate WilliamsWhy Investors Should HOPE the Market Goes Down

What Return Will I Get On My Investments? (AKA “The Run/Pass Analogy”)

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When having discussions about investments with clients, there is one question we get more than any other… What return will I get on my investments? It’s a great question. In our long-term financial plans we have to use a long-term estimate of market returns, so in a way we’re forced to answer this question. As such, our clients sometimes expect us to know the answer. After all, you can walk to the bank and they tell you exactly what the interest rate will be on a CD or savings bond. Can’t you do the same thing with all investments? Let us ask you a similar question: what exactly will the profits in your business be next year? And if we were investors in your business, what would be our exact return be? You don’t know for sure. In fact, you can’t know. Will there be a recession? Will all your patients disappear like …

Nate WilliamsWhat Return Will I Get On My Investments? (AKA “The Run/Pass Analogy”)

5 Investing Principles Every Dentist Should Know and Follow

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This post is the fourth in a series of five posts that lay out the PFG Investment Philosophy. This describes the five investing principles that every dentist should follow. Through these posts, we try and lay the foundation of knowledge around investments that clients should know, and answer the most commonly asked questions. Having a sound, well-researched, time-tested investment philosophy is like having a game plan to use against your next opponent. Most investment advisors (to say nothing of investors) do not have a specific investment philosophy to use to face the future. Instead, most investors, as well as many so-called advisors, look at last year’s returns (or last 5 years, or whatever) to pick their current plan. Unfortunately, this “return chasing” is a great way to lose your money. Here is what this plan looks like graphically: (idea for image borrowed from Carl Richards, author of “The Behavior Gap,” a book …

Nate Williams5 Investing Principles Every Dentist Should Know and Follow

The Two Best Investments for Dentists

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This post is the third in a series of five posts that lay out the PFG Investment Philosophy. This describes the two best investments for dentists. Through these posts, we try and lay the foundation of knowledge around investments that clients should know, and answer the most commonly asked questions. What are the Best Investments for Dentists? There are two. First, Invest in Yourself and Your Business We believe in this key principle of investing in yourself and your ability to earn a good living. We advise young dental school students to finish school; we advise recent grads to get a good job where they can further their skills and to look for a practice to buy or start; and we advise doctors who are in practice to reinvest back in their businesses in the form of advertising, new equipment and continuing education. But you personally can only do so …

Nate WilliamsThe Two Best Investments for Dentists