Investing as Foresight Practice

Do you invest? I hope you do, as investing, and teaching your children and friends to invest, is one of the classic ways people can and do put their futuring skills to the test. The great investors are all futurists to some degree, and a good study of their habits will help you improve your business and personal foresight skills as well. There are two types of investing, Conservative/Long-term and Speculative/Short-term (six months or less). Once you have enough saved and enough personal insurance to cover catastrophes, I hope you will choose to be involved in both. An asset mix that is commonly recommended is 80% conservative and 20% speculative.

9781118288252.pdfFor conservative investing, I have two main books to suggest for your edification. The first is Andrew Tobias’s brilliant The Only Investment Guide You Will Ever Need, 2011, which explores how saving, and cultivating a great understanding of the value of money, is by far the most important skill for any investor. For passive strategies, I highly recommend the The Permanent Portfolio, a modified version of which I’ve been following for several years now. A smartly asset-class-diversified approach like the permanent portfolio seems to me to be the best way to easily capture the growing financial value of our planet’s accelerating technical productivity, without being an active investor or trader. The Permanent Portfolio’s four asset classes are Index Stocks, Long-Term Treasury Bonds, Gold, and Cash. For some data on its performance, see Crawling Road’s 40-year retrospective study on its returns, which average 6 to 9% a year, depending on assumptions in calculations. This is nearly unbeatable for a passive investment strategy.

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